Your client is 32 years old. She wants to begin saving for retirement, with the first payment to come one year from now. She can save $13,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average return of 11% in the future.

a. If she follows your advice, how much money will she have at 65?

b. How much will she have at 70?

c She expects to live for 20 years if she retires at 65 and for 15 years if she retires at 70. If her investments continue to earn the same rate, how much will she be able to withdraw at the end of each year after retirement at each retirement age?

A) She will have $3,215,207.108 at 65 Years

B) she will have $5,498,772.38 at 70 years

C) a: If she retires at 65 years and lives for only 20 years she will need to withdraw $403,751.68 every year.

b) If she retires at 70 years and lives for only 15 years, she will need to withdraw $ 764,688.10 every year.

Explanation:

A) To get how much she would have saved with the aid of a financial calculator use the following

N = 65-33 = 32.

I = 11

PMT = $13,000

compute FV = and you will get $3,215,207.108.

B) To get how much she would have saved with the aid of a financial calculator use the following

N = 70-33 = 37.

I = 11

PMT = $13,000

compute FV = and you will get $5,498,772.38.

C) To get How much she can withdraw if she retires at either 65 years lives for 20 years

with also the aid of a fianacial calculator

N = 20

I = 11

PV = 3,215,207.108

Compute PMT = $403,751.68

while if she retires at 70 years and she lives for 15 years

N = 15

I = 11

PV = 5,498,772.38

Compute PMT = 764,688.10