Eric Works for a Company with a Defined Contribution Benefit

question 17

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:

Contract

An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable by law.

Right to Control

The authority or power to regulate, direct, or command something or someone's actions or decisions.

Conduct

Refers to the manner in which an individual behaves, especially within a professional or formal context.

Employer-Employee

The legal relationship between a person or company who hires and the individual who is hired to perform a specific task.