Question

An employee's current annual gross wage is $65,400. For retirement, the employee wants to have enough saved to live off 80% of the current annual gross wage and withdraw 4% the first year. Calculate the total the employee will need in retirement savings to achieve their retirement goal.

$1,308,000
$1,380,000
$130,800
$138,000

Answer 1

Answer: A- $1,308,000

Step-by-step explanation: The person above me was right, They're a life saver!!

Answer 2

To calculate the total the employee will need in retirement savings, we need to follow these steps:

Calculate 80% of the current annual gross wage: 0.8 x $65,400 = $52,320
Calculate the amount needed to withdraw 4% the first year: $52,320 / 0.04 = $1,308,000
Therefore, the employee will need a total of $1,308,000 in retirement savings to achieve their retirement goal.

So the answer is $1,308,000.