(Round the savings to the nearest dollar amount.) Option 1: Option 2: Requirement 3.
How much savings will you have accumulated at age 53 under the two options? Calculate the total amount of savings that you will have accumulated at age 53 under the two options. How much out-of-pocket cash will you invest under the two options? Calculate how much out-of-pocket cash you will invest under the two options. (Click the icon to view the future value annuity factor table.) 2 (Click the icon to view the future value factor table.) (Click the icon to view the present value annuity factor table.) (Click the icon to view the present value factor table.) Read the requirements. Assume you will earn the historic stock market average of 12% per year. You plan to save using one of the following two strategies: (1) save $4,800 a year in an IRA beginning when you are 23 and ending when you are 53 (30 years) or (2) wait until you are 43 to start saving and then save $14,400 per year for the next 10 years. If you let the savings continue to grow for nine more years (with no further out-of-pocket investments), under each scenario, what will the investment be worth when you are age 62?Īssume you want to retire early at age 53. How much savings will you have accumulated at age 53 under the two options? 3. How much out-of-pocket cash will you invest under the two options? 2.