You Are Saving for Retirement

question 26

Multiple Choice

You are saving for retirement.To live comfortably,you decide that you will need $2.5 million by the time you are 65.If you assume you are able to do that,and will live 20 more years (until age 85) ,the amount you can withdraw at the end of each of those years at an interest rate of 5% before your retirement fund is empty is closest to:

• A)$72,987.
• B)$75,606.
• C)$197,987.
• D)$200,606.

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Definitions:

Return on Investment

A financial ratio that calculates the profitability of an investment by dividing the profit from the investment by the cost of the investment.

Goal Congruence

The alignment of individual, team, or department goals with the overall objectives of the organization to ensure everyone is working towards the same outcomes.

Expectancy Theory

A theory in psychology that explains the process individuals undergo to make decisions based on the expected outcomes of their actions.

Incentive System

A method or plan used to motivate individuals or groups towards achieving certain performance goals.