None Ruby is 25 and has a good job at a biotechnology company. She currently has $10,200 in an IRA, an important part of her retirementnest egg. She believes her IRA will grow at an annual rate of 9 percent, and she plans to leave it untouched until she retires at age 65.Ruby estimates that she will need $875,000 in her total retirement nest egg by the time she is 65 in order to have retirement incomeof $20,000 a year (she expects that Social Security will pay her an additional $15,000 a year). Using Exhibit 1-A, Exhibit 1-B, Exhibit 1-C,Exhibit 1-D, answer the following questions.a. How much will Ruby's IRA be worth when she needs to start withdrawing money from it when she retires? (Round discount factor to3 decimal places and final answer to the nearest whole dollar.)Worth of IRAb. How much money will she have to accumulate in her company's 401(k) plan over the next 40 years in order to reach her retirementincome goal? (Round discount factor to 3 decimal places and final answer to the nearest whole dollar.)Money to accumulate

a.IRA is individual retirement account .We need to calculate the future value.:The formula is below…

Answered: Ruby is 25 and has a good job at a…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter14: Planning For Retirement

Section: Chapter Questions

Problem 2FPE

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Janine is 46 and has a good job at a biotechnology company. Janine estimates that she will need $886,000 in her total retirement nest egg by the time she is 65 in order to have retirement income of $27,000 a year. (She expects that Social Security will pay her an additional $17,000 a year) She currently has $4,500 in an IRA, an important part of her retirement nest egg. She believes her IRA will grow at an annual rate of 6 percent, and she plans to leave it untouched until she retires at age 65. How much will Janine's IRA be worth when she needs to start withdrawing money from it when she retires? Use (Exhibit 1-A. Exhibit 1-8. Exhibit 1-C. Exhibit 1-D). Note: Use appropriate factor(s) from the tables provided. Round time value factor to 3 decimal places and answer to 2 decimal places. Future value of IRA
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Courtney wants to retire in 15 years when she turns 62. She wants to have enough money to replace 75% of her current income less what she expects to receive from Social Security at the beginning of each year. Courtney expects to receive $25,714 per year from Social Security in today’s dollars at full retirement age of 67. However, she will take Social Security early at age 62, when she retires. Courtney is aggressive and wants to assume an 8% annual investment rate of return and that inflation will be 3% per year. Based on her family history, Courtney expects that she will live 30 years in retirement (age 92). If Courtney currently earns $80,000 per year and she expects her raises to equal the inflation rate, how much does she need at retirement to fulfill her retirement goals? $874,794. $1,022,807. $1,072,458. $1,583,152.
The Ali plan to retire and start receiving their Social Security benefits at the same time, when Jimmy is 67 and Lucy is 62 years old. Their monthly Social Security retirement benefits at those ages in today's dollars are estimated to be $3,200 for Jimmy and $2,000 for Lucy. They think their expenses in retirement in today's dollars will be 70% of their total cash outflows now. Other than Social Security, they will rely on their retirement savings in order to meet their retirement expenses. They want to assume they will die in the same year, when Jimmy is 95 and Lucy is 90 years old.Determine what the payments will be in the distribution phase. These will be the withdrawals Jimmy and Lucy will need to take monthly from their accounts, in order to meet their retirement expenses. How much is that monthly amount?Note: this question is asking about the withdrawals they will need, not about the expenses they will be incurring monthly.
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