Question

Noelle reminds Eugene that, as an early career professional, he's only making a fraction of the average American household income used in the chart ($78,635). So, she recommends Eugene calculate what his monthly pension would be if he contributes 10% of his monthly income to a pension fund. Given that Eugene's monthly income is $______, what would be his monthly pension?

Answer 1

Eugene's monthly pension would be 10% of his monthly income. To calculate this, he would multiply his income by 0.10. Costs such as rent, utilities, groceries, and others should be considered to ensure the pension contribution is feasible within his budget.

Step-by-step explanation:

To calculate Eugene's monthly pension contribution, we first have to know his monthly income. Since the monthly income is not provided in the question, let's assume a placeholder value. However, the calculation would involve taking 10% of Eugene's monthly income and designating that as his monthly pension contribution. If Eugene's monthly income is $X, then his monthly pension would be 0.10 × $X, which is the mathematical formula for 10% of his income.

Using the provided example of Mary Ann, who earns $2,589.10 monthly after taxes, if she saves 10%, she would set aside $258.91 each month. Her remaining budget would need to account for her expenses to determine if she can afford to save this amount. The process for Eugene would follow the same steps.

If Eugene has similar expenses to those mentioned for Mary Ann or the example individuals with various incomes, he will need to ensure his expenditures do not exceed 90% of his after-tax income to successfully set aside 10% for his pension. Detailed budgeting and awareness of cost of living in his community are also crucial to his financial planning.