Suppose you are currently 28 years old and expect to earn a constant real salary of $64,000 starting next year. You are planning to work for 32 years and then retire. You start off with a $200,000 inheritance and expect to live until age 87 and leave nothing. You are limited to investing in a risk free asset with a risk free rate of 2.8%. Develop a financial plan for real savings and real consumption over your life time.
I understand that the person earns till age 60 and lives till age 87. So we have 2 source of income until age 60 (salary +... View the full answer