You are planning for your retirement and have decided the following: you will retire in 35 years and will make monthly deposits into your retirement account of $400 for the next 15 years and then monthly deposits of $800 for the remaining 20 years until retirement. You have access to an account that earns a 7% rate of return. A.) How much will you have when you retire? B.) Once you retire, you plan to live off of the interest. If you make annual withdrawls, what will be your retirement income? C.) If your goal is to be able to live off $80,000 per year during retirement (instead of your answer to B), how much would you have to have at retirement to reach this goal?
Your $400 monthly deposits in 15 years time will be worth:$126,784.92
If you continue with $800 monthly for the following 20 years, then you will have $928,792.50, at the end of 35th year.
Based on this amount, you could get interest of $65,015 at your given rate of 7%.
However, if you wished to withdraw $80,000 a year, you could do that and it will last you 25 years at 7%.
