. Estimate your final annual salary before retirement. 2. Estimate how much money you would have in your 401K by the time your retire (t = 30). 3. At retirement, you decide to draw an annuity for the next 25 years by placing your funds in an account that earns a guaranteed 5% per year. Estimate your annual pension.
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(Need all three questions. ..Attempt if you will solve both parts ...thanks)
Right after graduating from FSU, you get your dream-job with a starting salary 100,000$ annually that is expected to grow by 5% every year. You plan to stay in that position for 30 years and then retire. You choose to contribute to a 401K, which along with your employer’s contributions will receive 15% of your annual salary. Your 401K is expected to make an annual return of 10% until you retire. Assume annual payments and annual compounding.
1. Estimate your final annual salary before retirement.
2. Estimate how much money you would have in your 401K by the time your retire (t = 30).
3. At retirement, you decide to draw an
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- You’ve landed your first job after graduation. Although retirement may seem like a long way off, you wisely enroll in your company’s retirement programs. In addition to maximizing your company’s 401K match you also plan to contribute $7000 per year to a self-directed fund for 35 years. Starting one year after you make your final contribution to this fund, how much could you withdraw each year from this account forever without impacting the fund’s balance? Assume the fund earns 6% per year.Having just started a nice job after graduation, you would like to be financially responsible and start planning for your expected retirement in 40 years. You have two main options to choose from: A) Use pretax money and invest in a 401k ( paying taxes on the back end) B) Use after-tax money and invest in a Roth IRA (paying taxes on the front end) Assume: you are looking to invest $3,000 worth of your pre- tax salary each year. - your current marginal tax rate is 22% based on your $70,000/year salary using current tax law - both options provide identical investment choices and you expect to earn 7.5% per year in either alternative the distributions from Roth IRA accounts will continue to not be taxed in future years - your estimated marginal tax rate will be 24 percent when you retire Which option will provide you with the highest retirement amount in 40 years when you plan to retire? Please provide a sensitivity analysis to assist in your decision-making.After completing your Bachelor of Business (Accounting) degree, suppose you secure a permanent position as an accountant. You drafted a financial plan to retire in 30 years from now. So, you are thinking about creating a fund that will allow you to receive $40,000 at the end of each year for 25 years after your retirement. The interest rates are expected to be 2.25% per annum during the 30year pre- retirement period and 1.75% during the retirement period. Required: a) To provide the 25- year, $40,000 a year annuity, calculate how much should be in the fund account when you retire in 30 years. b) How much will you need today as a single amount to provide the fund calculated in part (a) if you earn 2.35% per year during the 30 years preceding your retirement?c) What effect would a change (increase/decrease) in the interest rates, both during and prior to retirement, have on the values calculated in parts (a) and (b)? Explain why. d) (Using different interest rates) Assume that the…
- When you begin your new job, your employer says they will match any 401k deposits you make by 50% up to 5% of your overall salary annually. When you start your new job as a college grad, you will make $50400 per year and you decide to take full advantage of the matching by depositing 5% of your monthly salary every month. a) How much will YOU be depositing in the 401k each month from your salary? $ b) How much will YOUR EMPLOYER be depositingin the 401k each month? c) How much TOTAL will be deposited into your 401k each month? $ d) How much will you have in the account in 35 years if it pays 7.5% APR? $ e) How much total money will you put into the account after 35 years? $ f) How much total will the employer have put into the account after 35 years? $ g) How much total interest will you earn? $ h) If you choose NOT to take advantage of depositing money into the 401k because you feel you need that money to pay bills now, how much money will you be losing from your employer and interest…After graduation from university, you start working and you want to plan for your retirement. You will be retiring in 25 years and during your retirement, you plan to spend USD 20,000 per year. You expect your retirement to last 30 years. You believe you can earn 8% on your retirement savings. If you make annual payments into a retirement plan during your working life, how much will you need to save each year to reach your retirement goal? (You will make the first payment at the end of the year).Use the information for the question(s) below. Assume that you are 30 years old today and that you are planning on retirement at age 65. Your current salary is $45,000 and you expect your salary to increase at a rate of 5% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be made on your 31st birthday and will be 8% of this year's salary. Likewise, you expect to deposit 8% of your salary each year until you reach age 65. Assume that the rate of interest is 7%. The present value (at age 30) of your retirement savings is closest to: O A. $87,000. OB. $46,600. OC. $75,230. O D. $108,000.
- 21)Today is your 21st birthday, and you are opening up an investment account. Your plan is to contribute $2,000 per year on your birthday and the first contribution will be made today. Your 45th, and final, contribution will be made on your 65th birthday. If you earn 10 percent a year on your investments, how much money will you have in the account on your 65th birthday, immediately after making your final contribution? Do not use MS Excel for solution.You are meeting with a financial planner to begin saving for retirement. Your starting salary is $65,000 in year one and you expect to receive pay increases at a rate of 3% each year for the first 30 years of your career, then maintain your salary until you retire. Your financial planner advised you to invest 10% of your yearly salary into a retirement account to maintain a similar lifestyle in retirement. You expect to work for the next 40 years. How much will you have in the account when you retire if your retirement account produces an average return of 9% per year?1) In a few short years, you will graduate and enter the workforce. Let us suppose that you and a friend both start working at the age of 23 and decide on very different ways to fund your eventual retirement. In this exercise, we explore these decisions. Neither of you have any savings (P = 0), plan to retire at age 66, and expect to earn 8.4% annual interest, compounded monthly, on all your investments. a) Having taken this class, you decide to start immediately, investing $120 per month. How much money will be in your account in 20 years? b) At this point (you are now 43 years old), you will stop making monthly deposits into your account. Now, the amount you calculated in part (a) will accumulate interest for 23 years (until you are 66 years old). How much is in your account now? Indicoob selled pham
- Congratulations! You just got your first job and have decided to invest in the company's 401k plan for retirement. You're currently 22 years old and plan on retiring at 62. If you invest $3000 per year and can earn 9% on your funds each year, how much will you have when you retire?You are doing a special project for the boss and he is going to give you a $5,000 bonus when it is completed in 3 years. In the meantime, you and your partner are having a baby this year. You intend to put your bonus into a 6% investment and let it accumulate until the baby is 18 years old when you will withdraw the total amount for college expenses. How much will the fund be at the end of 18 years? O $11,983 O $116,380 O $154,503 O $179,742Problem 4: Planning for Life Right after graduating from LSU, you get your dream-job with a starting salary 100,000$ annually that is expected to grow by 5% every year. You plan to stay in that position for 30 years and then retire. You choose to contribute to a 401K, which along with your employer's contributions will receive 15% of your annual salary. Your 401K is expected to make an annual return of 10% until you retire. Assume annual payments and annual compounding. 1. Estimate your final annual salary before retirement. 2. Estimate how much money you would have in your 401K by the time your retire (t = 30). 3. At retirement, you decide to draw an annuity for the next 25 years by placing your funds in an account that earns a guaranteed 5% per year. Estimate your annual pension.