You have just turned 24, and you intend to start saving for your retirement. You plan to retire in 42 years when you turn 66. During your retirement you would like to have an annual income of $120,000 per year for the next 28 years (until age 94).
• Evaluate how much has to be in your account before the first withdrawal at age 67.
• Evaluate how much would have to save annually between now and age 67 in order to finance
your retirement income and to fill that account. (3 points) Make the following assumptions:
• Assume that the relevant compounded interest rate is 4.0 percent for all 70 years
• You make the first payment today and the last payment on the day you turn 66.
• You make the first withdrawal when you turn 67 and the last withdrawal when you turn 94.