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You plan on retiring in 29 years. To support your retirement, you want to be able to make 32 annual withdrawals of $120,000 each year, with the first withdrawal on the day you retire. Assuming you can earn 6.5% on your retirement account:

A) How large of a deposit do you have to make today to be able to achieve your retirement goal?

B) If you decide to save for your retirement by making annual deposits instead of a lump sum today, how much should your annual deposits be, if your first deposit is made at the end of the year and your last deposit one year before you retire (end of year 28)

C) Calculate monthly deposit for 28 years, Use PV not FV for monthly.

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Deanna Hettinger
Deanna HettingerLv2
28 Sep 2019

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You are 26 years old and decide to start saving for your retirement. You plan to save $ 5,500 at the end of each year​ (so the first deposit will be one year from​ now), and will make the last deposit when you retire at age 70. Suppose you earn 5 % per year on your retirement savings.

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​

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​

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