If You Accumulate $800,000 in Your Retirement Account and Can

question 44

Multiple Choice

If you accumulate $800,000 in your retirement account and can earn a constant annual rate of 5% on this money after retirement, how much will you be able to live on each year if you
Expect to live for 30 years after retirement? Assume that you will make your first withdrawal
At the end of one year, and round your answer to the nearest dollar.

• A)$18,510
• B)$52,041
• C)$28,000
• D)$27,922

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Definitions:

Scenario Analysis

The process of analyzing and evaluating possible future events by considering various feasible outcomes or scenarios, typically to assess potential risks and impacts.

Best Case Scenario

The most favorable or desirable outcome possible in a given situation.

Worst Case Scenario

the most adverse condition or outcome that can reasonably be projected.

Base Case

The default scenario in scenario analysis, used as a benchmark to compare the outcomes of alternative assumptions or actions.