I want to retire on my 60th birthday. I want to collect $50,000 a year from my retirement investment until I turn 90. This $50,000 may be one payment or periodic payments that add up to $50,000 each year. I would like to collect my first payment on the day I retire.
I am about to turn 25 and think I should start investing for retirement on my 25th birthday. However, I would also like to know what the cost of my retirement will be if I delay starting the investment until my 35th birthday.
You are my financial advisor. I have given you the input above and asked you to advise me how you think I should fund my retirement.
You have found two financial institutions that you feel will be able to meet my goals. You believe both these institutions will be around for the next 100 years, and they will have the present plans available for the foreseeable future.
Institution A will pay 5.00% compounded quarterly.
Institution C will pay 4.925% compounded monthly.
You are to provide me a report on the options I may choose to fund my retirement and to collect my retirement. Include the costs and benefits for each alternative you analyze.
Show all your work and results clearly .