Question

Bowie, age 52 has come to you for help in planning his retirement.  He works for a bank where he earns $60,000. 

He would like to retire at age 62.  He has consistently earned 8% on his investments and inflation has averaged 3%.  Assuming he is expected to live to age 95 and he has a wage replacement ratio of 80%, how much more will he need at retirement to have the same amount at his death with an equal purchasing power as he will have at his retirement.  Amount at retirement is $1,101,823.40

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