Question

Robin is planning for her retirement. She is currently 37 years old and plans to retire at age 62 and live until age 97. Robin currently earns $100,000 per year and anticipates needing 80% of her income during retirement. She anticipates Social Security will provide her with $15,000 per year at age 62, leaving her with required savings to provide $65,000 ($100,000 x 0.80 - $15,000) annually during retirement. She believes she can earn 11% on her investments and inflation will be 2% per year. How much must Robin save at the end of each year if she wants to make her last savings payment at age 62 to meet her retirement goal, assuming she wants to maintain the original purchasing power of her capital balance?

          Robin is planning for her retirement. She is currently 37 years
old and plans to retire at age 62 and live until age 97. Robin
currently earns $100,000 per year and anticipates needing 80% of
her income during retirement. She anticipates Social Security will
provide her with $15,000 per year at age 62, leaving her with
required savings to provide $65,000 ($100,000 x 0.80 - $15,000)
annually during retirement. She believes she can earn 11% on her
investments and inflation will be 2% per year. How much must
Robin save at the end of each year if she wants to make her last
savings payment at age 62 to meet her retirement goal, assuming she
wants to maintain the original purchasing power of her capital
balance?

Added by Vicenta E.

Question

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