Problem: You have just turned 25, and you intend to start saving for your retirement. You plan to retire in 43 years when you turn 68. During your retirement you would like to have an annual income of $120,000 per year for the next 27 years (until age 95).
Calculate how much you would have to save between now and age 68 in order to finance your retirement income.
Make the following assumptions:
1. All savings draw compounded interest of 10 percent per year.
2. You make the first payment today and the last payment on the day of your turn 68 (43 annual end of the year payments).
3. You make the first withdrawal when you turn 68 and the last withdrawal when you turn 95 (27annual withdrawals).