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The Suarezes are looking to retire at age 66, as described in detail in the RETIREMENT INFORMATION section of the case study. What balance do they need on the first day of retirement to support this goal, taking their Social Security benefit into account? Assume a 7% investment return on their retirement portfolio before they retire and a 5% return after they retire, and that inflation will average 3% for their entire lives. Assume that Social Security benefits will adjust annually by the inflation rate. Please include your calculator steps and inputs in your answer. David & Sofia, both age 40. David & Sofia's life expectancy in retirement is 30 years Real rate of return before retirement is 4% (7% -3% = 4%). Real rate of return after retirement is 2% (5% -3% = 2%). David & Sofia combined annual salary David & Sofia 70% of current earned income = $182,000. $182,000 X 70% = $127,400. David & Sofia combined monthly/annual social security benefit =1 $4,700 X 12 = $ 56,400.

The Suarezes are looking to retire at age 66, as described in detail in the RETIREMENT INFORMATION section of the case study. What balance do they need on the first day of retirement to support this goal, taking their Social Security benefit into account? Assume a 7% investment return on their retirement portfolio before they retire and a 5% return after they retire, and that inflation will average 3% for their entire lives. Assume that Social Security benefits will adjust annually by the inflation rate. Please include your calculator steps and inputs in your answer. David & Sofia, both age 40. David & Sofia's life expectancy in retirement is 30 years Real rate of return before retirement is 4% (7% -3% = 4%). Real rate of return after retirement is 2% (5% -3% = 2%). David & Sofia combined annual salary David & Sofia 70% of current earned income = $182,000. $182,000 X 70% = $127,400. David & Sofia combined monthly/annual social security benefit =1 $4,700 X 12 = $ 56,400.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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The Suarezes are looking to retire at age 66, as described in detail in the RETIREMENT INFORMATION section of the case study. What balance do they need on the first day of retirement to support this goal, taking their Social Security benefit into account? Assume a 7% investment return on their retirement portfolio before they retire and a 5% return after they retire, and that inflation will average 3% for their entire lives. Assume that Social Security benefits will adjust annually by the inflation rate. Please include your calculator steps and inputs in your answer. David & Sofia, both age 40. David & Sofia's life expectancy in retirement is 30 years Real rate of return before retirement is 4% (7% -3% = 4%). Real rate of return after retirement is 2% (5% -3% = 2%). David & Sofia combined annual salary David & Sofia 70% of current earned income = $182,000. $182,000 X 70% = $127,400. David & Sofia combined monthly/annual social security benefit =1 $4,700 X 12 = $ 56,400.
Transcribed Image Text:The Suarezes are looking to retire at age 66, as described in detail in the RETIREMENT INFORMATION section of the case study. What balance do they need on the first day of retirement to support this goal, taking their Social Security benefit into account? Assume a 7% investment return on their retirement portfolio before they retire and a 5% return after they retire, and that inflation will average 3% for their entire lives. Assume that Social Security benefits will adjust annually by the inflation rate. Please include your calculator steps and inputs in your answer. David & Sofia, both age 40. David & Sofia's life expectancy in retirement is 30 years Real rate of return before retirement is 4% (7% -3% = 4%). Real rate of return after retirement is 2% (5% -3% = 2%). David & Sofia combined annual salary David & Sofia 70% of current earned income = $182,000. $182,000 X 70% = $127,400. David & Sofia combined monthly/annual social security benefit =1 $4,700 X 12 = $ 56,400.
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