Eric Works for a Company with a Defined Contribution Benefit

question 205

Essay

Eric works for a company with a defined contribution benefit pension plan.He will retire in ten years (at age 65)and expects his salary to be $100,000 in his last year of work.Social security should pay him $1,325 per month at that time.If he needs 80 percent of his income to maintain his standard of living upon retirement,how much annual income will he need from his employer's plan and from his own planning when he retires? (Show all work. )

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Definitions:

Phosphorus

A nonmetallic chemical element with the symbol P, essential for life, found in DNA and cell membranes.

Elemental Symbol

A one- or two-letter abbreviation that represents a chemical element as found on the periodic table.

Antimony

A metalloid element with the symbol Sb, used in alloys, fire retardants, and in semiconductor technology.

Elemental Symbol

A notation consisting of letters that represent a chemical element, used in chemical formulas and equations.