Project 4 Retirement Planning Retirement planning. Use Worksheet 14.1 to assist


Project 4 Retirement Planning
Retirement planning. Use Worksheet 14.1 to assist Tara Easley
with her retirement planning needs. She plans to retire in 15 years, and her
current household expenditures run about $50,000 per year. Tara estimates that
she’ll spend 80 percent of that amount in retirement. Her Social Security
benefit is estimated at $15,000 per year, and she’ll receive $12,000 per year
from her employer’s pension plan (both in today’s dollars). Additional
assumptions include an inflation rate of 4 percent and a rate of return on
retirement assets of 8 percent a year before retirement and 5 percent
afterward. Use Worksheet 14.1 to calculate the required size of Tara’s
retirement nest egg and the amount that she must save annually over the next 15
years to reach that goal.


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