Silvia wants to retire at 65 and live on $40,000 a year. How much does she need to save to ensure that her retirement funds last until she is 85?Select the best answer from the choices provided.$800,000 because she will need to save for 20 years times $40,000more than $800,000 because taxes and inflation will increase the value of her savingsless than $800,000 because returns will continue to increase the amount in her savings even after retirementmore than $800,000 because compound return will reduce her savings

Accepted Solution

She must save 800,000 because that's how much she'll need in those 20 years of retirement. The first choice is correct.