Math
- How old are you now? At what age do you hope to retire? These questions are really about answering: How many years do you have until you retire?
- Based on how you want to live in retirement and any other sources of retirement income you have available, how much money do you think you will need to draw from this savings account each year during retirement?
- You are about to set up a new retirement savings account that earns interest at a 3% annual interest rate (APR). You want to make monthly contributions to that account from now until you retire. The goal is to save enough money so that you will be able to withdraw the money you need each month without depleting your principal (in reality, you will probably deplete your principal gradually). How much money do you need to contribute to the account each month?
- With the 3% account, the monthly payments might be difficult to maintain, so you decide to wait 5 more years until you retire. What are your monthly payments with this plan?
- Suppose you can find an account that earns interest at 4% interest instead. How does that change your monthly payments? (You choose how long until you retire in this question.)
- State your conclusions and interpretations of these calculations.
10 years ago 5
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