SOLUTION: You want to be able to withdraw $35,000 from your account each year for 25 years after you retire. You expect to retire in 20 years. If your account earns 8% interest, how mu

Algebra ->  Finance -> SOLUTION: You want to be able to withdraw $35,000 from your account each year for 25 years after you retire. You expect to retire in 20 years. If your account earns 8% interest, how mu      Log On


   

Question 1202512: You want to be able to withdraw $35,000 from your account each year for 25 years after you retire.
You expect to retire in 20 years.
If your account earns 8% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?
Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!

you would need to have 373,617.17 in your account at the beginnong of the 25 year retirement period.

you would need to deposit 8164.36 at the end of each year for 20 years prior to the start of your retirement period.

i used the calculator at https://arachnoid.com/finance/ to get both these results.

here are the results.






in the first analysis, you set the withdrawal to be 35000 at the end of each year for 25 years.

that analysis tells you that you would need 373,617.17 at the beginning of the 25 year retirement period.

in the secnd analysis, you set the future value to be 373,617.17 at the end of the 20 year investment period.

that analysis tells you that you would need to invest 8,164.36 at the end of each year until you retire.

the assumption is that you will start withdrawing one year after you make your last yearly investment.

the interest rate is 8% per year during the 20 year investment period and during the 25 year withdrawal period.