Question

Your 30 year old client wants to retire when heis 65 years old, and have a retirement income equivalent to $3,500 per month in today's dollars. we cannot be sure of how longwe live after retirement, but the client wants to be extra careful and save for 30 years of after retirement life. market expectation for average annual inflation for the future is 1.7%. because of inflation, he will need substantially higher retirement monthly income to maintain the same purchasing power. he plans to purchase a lifetime annuity from an insurance company one month before he retires, where the retirement annuity will begin in exactly 35 years (420 months). the insurance company will add a 2.50 percent premium to the pure premium cost of the purchase price of the annuity. the pure premium is actuarial cost of his anticipated lifetime annuity. he has only saved $25,000 so far. he will make the first payment in a month from now and the last payment one month before he retires (a total of 419 monthly payments

Answer 1

Answer:Retirement experts have offered various rules of thumb about how much you need to save: somewhere near $1 million, 80% to 90% of your annual pre-retirement income, 12 times your pre-retirement salary.

Step-by-step explanation:

it will be 1 million i took the quiz hope this helps