Dear Financial Adviser, My spouse and I are each 62 and hope to retire in three years. After retirement we will receive $7,600 per month after taxes from our employers' pension plans and $1,600 per month after taxes from Social Security. Unfortunately our monthly living expenses are 15,100. Our social obligations preclude further economies. We have $1,010,000 invested in a high-grade, tax-free municipal-bond mutual fund. The return on the fund is 4.0% per year. We plan to make annual withdrawals from the mutual fund to cover the difference between our pension and Social Security income and our living expenses. Sincerely, Luxury Challenged Marblehead, MA "ou can assume that the withdrawals (one per year) will sit in a checking account (no interest) until spent. The couple will use the account to cover the monthly shortfalls. How many years before Luxury Challenged runs out of money?

Dear Financial Adviser, My spouse and I are each 62 and hope to retire in three years. After retirement we will receive $7,600 per month after taxes from our employers' pension plans and $1,600 per month after taxes from Social Security. Unfortunately our monthly living expenses are 15,100. Our social obligations preclude further economies. We have $1,010,000 invested in a high-grade, tax-free municipal-bond mutual fund. The return on the fund is 4.0% per year. We plan to make annual withdrawals from the mutual fund to cover the difference between our pension and Social Security income and our living expenses. Sincerely, Luxury Challenged Marblehead, MA "ou can assume that the withdrawals (one per year) will sit in a checking account (no interest) until spent. The couple will use the account to cover the monthly shortfalls. How many years before Luxury Challenged runs out of money?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter15: Choice Of Business Entity—other Considerations

Section: Chapter Questions

Problem 94TPC

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Dear Financial Adviser, My spouse and I are each 62 and hope to retire in 3 years. After retirement we will receive $5,000 per month after taxes from our employers’ pension plans and $1,000 per month after taxes from Social Security. Unfortunately our monthly living expenses are $15,000. Our social obligations preclude further economies. We have $1,200,000 invested in a high-grade, municipal-bond mutual fund. However, the fund's annual after-tax return has dropped to 3.5%. We plan to make annual withdrawals from the mutual fund to cover the difference between our pension and Social Security income and our living expenses. How long will our money last? Sincerely, Luxury Challenged Marblehead, MA You can assume that the withdrawals (one per year) will sit in a checking account (no interest) until spent. The couple will use the account to cover the monthly shortfalls. How many years before Luxury Challenged runs out of money? (Do not round intermediate calculations. Round your answer to 2…
Bob and Rose are both 62 years old and plan to retire in 3 years. They will receive $5,000 per month after taxes from pension plans and $1,000 per month after taxes from Social Security after retirement. Regrettably, their living expenses are $15,000 per month. Further economies are ruled out due to their social obligations. They have invested $1,200,000 in a high-quality corporate bond mutual fund. However, the fund's annual after-tax return has dropped to 3.5%. Thus, they intend to withdraw money from the fund on an annual basis to cover the gap between their pension and social security income and their living expenses. How long will the money last?Bob and Rose are both 62 years old and plan to retire in 3 years. They will receive $5,000 per month after taxes from pension plans and $1,000 per month after taxes from Social Security after retirement. Regrettably, their living expenses are $15,000 per month. Further economies are ruled out due to their social obligations. They have…
Bob and Rose are both 62 years old and plan to retire in 3 years. They will receive $5,000 per month after taxes from pension plans and $1,000 per month after taxes from Social Security after retirement. Unfortunately, their living expenses are $15,000 per month. Further economies are ruled out due to their social obligations. They have invested $1,200,000 in a high-quality corporate bond mutual fund. However, the fund's annual after-tax return has dropped to 3.5%. Thus, they intend to withdraw money from the fund on an annual basis to cover the gap between their pension and social security income and their living expenses. How long until the money runs out?
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Your friend is celebrating her 30th birthday today and wants to start saving for her anticipated retirement at age 65. She wants to be able to withdraw $100,000 from her savings account on each birthday for 25 years following her retirement, with the first withdrawal on her 66th birthday. Your friend intends to invest her money in the local credit union, which offers 8 percent interest per year. She wants to make equal annual payments on each birthday into the account established at the credit union for her retirement fund.b.) Suppose your friend has just inherited a large sum of money. Rather than making equal annual payments, she has decided to make one lump-sum payment on her 30th birthday to cover her retirement needs. What amount does she have to deposit?
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