Which of the following strategies will allow real retirement spending to remain approximately equal,assuming savings of $1,000,000 invested at 8%,a 25-year horizon,and 4% expected inflation?
A) Spend approximately $63,000 annually.
B) Spend approximately $78,225 annually.
C) Spend approximately $93,680 annually.
D) Spend approximately $127,500 annually.

Question

Quizplus · Accepted Answer

Spending approximately $63,000 annually will allow real retirement spending to remain approximately equal, assuming savings of $1,000,000 invested at 8%, a 25-year horizon, and 4% expected inflation. This is because the real return on investment is 4%, which means that the spending power of the savings will remain approximately the same over time.

Which of the Following Strategies Will Allow Real Retirement Spending