A young couple, age 25, is doing some retirement planning. They plan to retire in 40 years at age 65. They think they will live for 20 years in retirement until age 85. During retirement they plan to travel and live well, so they expect to spend $80,000 per year during their retirement years. They believe that they can earn 5% interest on their retirement savings. using excel
1. How much money does this couple to need to have in their retirement account on the day they retire (age 65), in order to withdraw $80,000 per year during their 20 years in retirement, if their retirement fund is earning 5%? They do not want to leave an inheritance for anyone.
2. How much could this couple spend each year in retirement if they wanted to be sure to leave an inheritance of $250,000 or their grandchildren?
3. How much should this couple save each year starting at age 25 to reach their retirement goal at age 65, assuming they can earn 9% each year on their investment?