Retirement Savings Options Answers

Ron is 25 years old and is retiring at the age of 65. When he retires, he will need a monthly income of $4,123 for 20 years. If Ron contributes 10% of his monthly income to a 401(k) paying 5.5% compounded monthly, will he reach his goal for retirement given that his monthly income is 3,142.23? If he does not make his goal then state by what amount he will need to supplement his income. Round all answers to the nearest cent.a.Ron will meet his monthly goal of exactly $4,123 for retirement.b.Ron will meet his monthly goal of $4,123 for retirement with an excess of $125.34.c.Ron will not make his monthly goal of $4,123 and will need $359.74 to supplement his monthly income when he retires.d.Ron will not make his monthly goal of $4,123 and will need $450.61 to supplement his monthly income when he retires.

Determine the amount needed such that when it comes time for retirement, an individual can make monthly withdraws in the amount of $2,154 for 30 years from an account paying 5.1% compounded monthly. Round your answer to the nearest cent.a.$396,721.78b.$398,407.85c.$775,440d.$1,833,962.40

What is the biggest difference in who controls the 401(k) and IRA retirement plans? a. IRA is intended for a stable retirement income, while a 401(k) is reserved for emergencies or luxuries. b. 401(k) is a good last minute investment for retirement, while IRAs require years of investing. c. IRAs allow one to save a lot more money towards retirement than a 401(k). d. A 401(k) is controlled and monitored by an employer, and an IRA is controlled by the investing individual. Please select the best answer from the choices provided

Ethan is planning for his retirement. He has narrowed it down to two investment options. The first is an IRA where monthly payments are made, in the amount of $416.66, for 30 years. The second is a Roth IRA where annual payments are made, in the amount of $5000, for 30 years. If both compound interest at a rate of 2.5%, determine which account will yield the largest future value for Ethan, and how much greater that value will be than that of the other account. Round your final answer to the nearest cent.a.IRA; $3,552.72b.Roth IRA; $3,552.72c.IRA; $1,470.39d.Roth IRA; $1,470.39

Tina contributes 9.5% of her monthly salary towards her 401(k) and her employer matches her contribution up to 5.4% of her annual salary. If the interest rate of her 401(k) is 8.1% compounded monthly and her monthly salary is $2,461, determine the amount in her account after 25 years. Round to the nearest cent. a. $339,804.33 b. $354,452.86 c. $344,941.24 d. $347,269.59 Please select the best answer from the choices provided

Ana is retiring next year from the school that she has taught at for the last 25 years. Her pension pays a monthly salary of $1,562.32. She also receives a monthly income from an IRA that she has made regular monthly payments, in the amount of $230.32, for the last 15 years. If Ana plans on using her pension and the funds from her IRA as her primary source of income for the next 10 years, determine Ana’s monthly income given that her IRA compounds interest at 2.3% monthly. Round to the nearest cent.a.$2,024.02b.$1,887.42c.$461.70d.$325.10

Trent is 25 years old and works for a company that matches his 401(k) contribution up to 5%. The interest rate for his 401(k) is 7.3%. If he puts away 10% of his $32,000 salary every year, what would the total of his 401(k) be in 10 years? Round your answer to the nearest cent. a. $67,266.16 b. $72,176.59 c. $33,250.60 d. $35,677.89 Please select the best answer from the choices provided

Ron is 30 years old and is retiring at the age of 65. When he retires, he will need a monthly income of $1,270 for 10 years. If Ron contributes 5% of his monthly income to a 401(k) paying 2.75% compounded monthly, will he reach his goal for retirement given that his monthly income is $1,571.12? If he does not make his goal then state by what amount he will need to supplement his income. Round all answers to the nearest cent.a.Ron will meet his monthly goal of exactly $1,270 for retirement.b.Ron will meet his monthly goal of $1,270 for retirement with an excess of $7.42.c.Ron will not make his monthly goal of $1,270 and will need $74.16 to supplement his monthly income when he retires.d.Ron will not make his monthly goal of $1,270 and will need $741.68 to supplement his monthly income when he retires.

A Roth Individual Retirement Account allows you to draw a fixed amount that is not taxed. The maximum amount that an individual can contribute annually to a Roth IRA is $5,000. Determine the future value of such an account given that the annual percent rate is 1.2%, and an annual payment of $2,675.32 is made at the end of each year for 30 years. Round to the nearest cent.a.$95,245.67b.$95,340.91c.$97,074.97d.$95,923.88

Why would a Roth 401(k) investment plan allow you to invest the most amount of money?a.The federal government subsidizes a portion of a Roth 401(k) to help people in lower tax brackets save for retirement. b.Roth 401(k) plans are reserved for administrators and executives, who have a higher income which would allow them to invest more.c.A Roth 401(k) plan takes money after tax has been removed from gross income, and has a contribution limit, but withdrawal is tax free. d.The contribution limit of a Roth 401(k) plan is more than double the limit of the traditional 401(k).