Kirby is 59 years of age. He is planning for future long-term care needs. He knows that yearly nursing home costs in his area are currently $80,000, with prices increasing by 7 percent annually. Kirby also is willing to assume a five year LTC need. How much does Kirby need on his first day of care to fully fund LTC costs if he goes into a nursing care facility at age 80 ? Assume that he can earn 9 percent on savings ( before taxes) and that he is in a 20 percent combined state and federal marginal income tax bracket.
Kirby is 59 years of age. He is planning for future long-term care needs. He knows that yearly nursing home costs in his area are currently $80,000, with prices increasing by 7 percent annually. Kirby also is willing to assume a five year LTC need. How much does Kirby need on his first day of care to fully fund LTC costs if he goes into a nursing care facility at age 80 ? Assume that he can earn 9 percent on savings ( before taxes) and that he is in a 20 percent combined state and federal marginal income tax bracket.
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter14: Planning For Retirement
Section: Chapter Questions
Problem 2FPE
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