Bowie, age 52, has come to you for help in planning his retirement. He works...
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Bowie, age 52, has come to you for help in planning his retirement. He works for a bank, where he earns $60,000. Bowie would like to retire at age 62. He has consistently earned 8% on his investments and inflation has averaged 3%. Assuming he is expected to live until age 95 and he has a wage replacement ratio of 80%, how much will Bowie need to have accumulated as of the day he retires to adequately provide for his retirement lifestyle? Step 1: Determine the present value of capital needs Step 2: Determine the future value of the capital needed in the first year of retirement Step 3: Determine the amount of savings (capital balance) needed at retirement to fund expenses throughout remainder of life expectancy using an annuity due a. $726,217.09. b. $784,314.45. c. $1,050,813.28. d. S1,101,823.40
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