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increased by 4 to 15 percent per year, although faculty salaries are subject to severe compression, so he does not expect to receive such generous increases into the future. In addition to his salary, Bob typically earns $10,000 to 20,000
per year from consulting, executive education, and other activities. In addition to the 10 percent regular contribution the school makes to Bobs retirement savings, Bob also �contributes a substantial amount. He is currently setting aside$7,500 per year (before taxes). The maximum tax-deferred amount he can contribute is currently $10,000; this limit riseswith inflation. If he were to increase his savings toward retirement above the limit, he would have to invest after-tax dollars. All of Bobs retirement savings are invested with �TIAACREF (Teachers Insurance and Annuity Association-�College Retirement Equities Fund; home page: -cref.org), which provides various retirement, investment, and insurance services to university professors and researchers. Bob has contributed to Social Security for many years as required by law, but in light of the problems with the Social Security trust fund he is uncertain as to the level of benefits that he will actually receive upon retirement. (The Social Security Administrations website is .) Bobs ��TIAA-CREF holdings currently amount to $137,000. These