Interest Rates in Retirement
You are 20 years from retirement, and expect to live another 20 years after retirement. If you start saving now, how much will you be able to withdraw each year for every dollar per year that you save, assuming an effective annual interest rate of:
a. 0, 1%, 2%, 3%, 3.5%, 4%, 6%, 8%, and 10%?
b. How would your answer change if you expect the rate of inflation to be 4% per year?