(a)
Adequate information:
Present age is 60
Current amount in account: $400,000
Average annual earnings is $65,000
To determine: Social security disability benefits if a person has present annual earnings of $65,000.
Introduction: Social security disability benefits can be defined as the benefits that are provided to persons who are physically challenged or to their families in terms of money.
(b)
Adequate information:
Present age is 60
Current amount in account - $400,000
Average annual earnings is $65,000
To compute: Retirement benefits at the age of 65.
Introduction: Retirement benefits can be availed by an individual when the person becomes retired and support is provided by offering some amount on the basis of annual income.
(c)
Adequate information:
Present age is 60
Current amount in account - $400,000
Interest rate is 4%
To compute: The earnings each year at a 4% interest rate on a $400,000 portfolio.
Introduction:
(d)
Adequate information:
Present age is 60
Current amount in account - $400,000
Interest rate is 4%
To compute: The amount that can be withdrawn each month for 25 years from now.
Introduction: Future value refers to the amount that an investor expects to receive in the future on its current investment at given discount rates.
(e)
To advice: An option to Person J.
Introduction: Retirement benefits can be availed by an individual when the person becomes retired and support is provided by offering some amount on the basis of annual income.
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Personal Finance (MindTap Course List)
- 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.arrow_forwardKaren has been moonlighting as a life coach. This year she made over $65,000 and would like to not realize some of those earnings, maybe in a retirement account. However, she already contributes $6,000 to her qualified retirement plan at her regular employer. What can she do? A : She can contribute some of the $65,000 in a Keogh plan, if she stops participating in her employer’s plan. B : She can contribute some of the $65,000 in an employee stock ownership plan. C : She can contribute some of the $65,000 in a Keogh plan. D : She cannot do anything because she has a qualified retirement plan available at her employer.arrow_forwardI tried doing this problem and I am not cinfident in my answer. Could you help me out? Over the years, Samuel and Elizabeth Paget, of Elon, North Carolina, have accumulated $200,000 and $220,000, respectively, in their employer-sponsored retirement plans. If the amounts in their two respective accounts earn a 6 percent rate of return over Samuel and Elizabeth's anticipated 20 years of retirement, how large an amount could be withdrawn from the two accounts each month? (Use PV of an annuity table, etc.)arrow_forward
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