Question

Riya's current annual gross wage is $81,000.00. For retirement, she wants to have enough saved to live off of 80% of her current annual gross wage and withdraw 4% the first year. Calculate the total Riya will need in retirement savings to meet her retirement income goal.

$1,480,000.00
$1,545,000.00
$1,620,000.00
$1,710,000.00

Answer 1

Riya wants to have enough saved to live off of 80% of her current annual gross wage, which is $81,000.00 * 80/100 = $64,800.00.

She wants to withdraw 4% of her retirement savings the first year, which means she will need to have $64,800.00 / .04 = $1,620,000.00 saved.

So the answer is $1,620,000 (Second to last one)