Suppose you are now retired and expect to live for 20 years


Suppose you are now retired and expect to live for 20 years. Assume you have $800,000 invested in various accounts and expect these investments to earn a nominal annual rate of 6%. You also expect inflation to average 3% per year. You want to withdraw a constant real amount annually over the next 20 years so as to maintain a constant standard of living (i.e., after your first withdrawal, each subsequent withdrawal will increase by 3% in nominal terms to cover the costs of inflation). If the first withdrawal is to be made today, what is the amount of that initial withdrawal? In a table or spreadsheet, show the remaining balance after each of your 20 withdrawals.

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Suppose you are now retired and expect to live for 20 years
Reference No:- TGS02291554

Expected delivery within 24 Hours