Allison, age 40, earns $95,000 annually; her wage replacement ratio has been determined to be 70%. She expects inflation will average 3% over her entire life expectancy. She expects to work until 67, and live until 95. She anticipates a 7.5% return on her investments. Allison does not expect to receive any Social Security retirement benefits 1. Calculate Allison’s annual retirement needs in today’s dollars
2. What is the amount of Allison’s first retirement distribution at age 67
3. Calculate Allison’s capital needed at retirement age 67