You have just turned 30 years old, have just received your MBA, and have accepted your first job. Now you must decide how much money to put into your retirement.plan. You are required to specity a fixed percentage of your salary that you want to contribute. Assume that your starting salary is $75,000 per year and it will grow 2% per year until you retire. Every dollar in the plan earns 7% per year. You cannot make withdrawals until you retire on yo sixty-fifth birthday. After that point, you can make withdrawals as you see fit. You decide that you will plan to live to 100 and work until you tum 65. You estimate that to live comfortably in retirement, you will need 5100,000 per y starting at the end of the first year of retirement and ending on your 100th birthday. What percentage of your income do you need to contribute to the plan every year to fund your retirement income? The fraction of your salary that you should save is %. (Round to two decimal placcs.)
You have just turned 30 years old, have just received your MBA, and have accepted your first job. Now you must decide how much money to put into your retirement.plan. You are required to specity a fixed percentage of your salary that you want to contribute. Assume that your starting salary is $75,000 per year and it will grow 2% per year until you retire. Every dollar in the plan earns 7% per year. You cannot make withdrawals until you retire on yo sixty-fifth birthday. After that point, you can make withdrawals as you see fit. You decide that you will plan to live to 100 and work until you tum 65. You estimate that to live comfortably in retirement, you will need 5100,000 per y starting at the end of the first year of retirement and ending on your 100th birthday. What percentage of your income do you need to contribute to the plan every year to fund your retirement income? The fraction of your salary that you should save is %. (Round to two decimal placcs.)
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 33P
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