Texts: How to work using BA II Plus calculator
Information:
Student 1
Age: 19
Retirement income amount: $30,000
Life expectancy in years: 83 years
Long-term Interest Rate: 4.5% compounded annually
Long-term Annual Canadian inflation rate: 3.4% per year
Inheritance Amount (show work):
Assume Student 1 will input $100,000 today for the RRSP plan.
2. For each student, take their annual retirement amount and project it forward to the age of retirement, which will be 65 years old. Break this number down into monthly earnings. Show your work.
3. Assume that monthly income remains constant in retirement. Using your projected monthly income numbers for each student along with other needed information, calculate the amount of money that must be in the RRSP at the age of retirement in order to fund the future monies involved. Show your work.
4. Assume that monthly income remains constant in retirement. Using your projected monthly income numbers for each student along with other needed information, calculate the amount of money that must be in the RRSP at the age of retirement in order to fund the future monies involved. Show your work.
5. A lot of companies advertise something similar to "Freedom 55", which means that you can retire at age 55 instead of age 65. For each student, determine the impact of retiring at age 55 on each of the monthly contributions. Discuss the implications of what you see. Show your work.