Sherman is planning for his retirement. He is currently 36 and plans to retire in...
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Sherman is planning for his retirement. He is currently 36 and plans to retire in 31 years, at age 67. He expects then to live an additional 30 years, until age 97. He expects inflation to average 5% per year. Based on his assumptions about investment returns, inflation and Social Security, and his desired Wage Replacement Rate, he believes he will need to accumulate $7,000,000 in nominal terms by the day of his retirement in order to produce enough income to achieve his retirement income goal. Use the Annuity method with the Dalton approach. He assumes that before retirement he can obtain a nominal rate of return 9% per year, and 7% per year after retirement. How much does he need to contribute to his retirement fund at the end of eash year to accumulate enough by the day he retires?
Sherman is planning for his retirement. He is currently 36 and plans to retire in 31 years, at age 67. He expects then to live an additional 30 years, until age 97. He expects inflation to average 5% per year. Based on his assumptions about investment returns, inflation and Social Security, and his desired Wage Replacement Rate, he believes he will need to accumulate $7,000,000 in nominal terms by the day of his retirement in order to produce enough income to achieve his retirement income goal. Use the Annuity method with the Dalton approach. He assumes that before retirement he can obtain a nominal rate of return 9% per year, and 7% per year after retirement. How much does he need to contribute to his retirement fund at the end of eash year to accumulate enough by the day he retires?
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