Assume you are 30 years old and you plan to accumulate $1 million by your retirement date, which is 30 years from now. Also, assume that you plan to live for 25 years after your retirement - that is until age 85. You plan to make 30 annual deposits of equal amounts in your bank to save for retirement. The bank pays 10% interest annually.
Assume inflation is 0%
How much do you plan to deposite annually to accumulate $1 million for your retirement?
How much will be your retirement payment (benefit)?
What factor(s) can you change to reduce your annual deposit while improving your annual retirement benefit?
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