I just want to know if my thought process is correct. I want to know “how much to save”.
Rate of return = 10%
Life expectancy = 90
Retirement age = 60
Current age = 25
Monthly income = $4000
Saving frequency is weekly
End of period CF and retirement happens on first day of retirement
I would find the periodic rate since it’s compounded semi-annually.
periodic rate = (1 + 10% / 2) ^ (2 / 12) - 1
Then use it to find the PV of how much I would need if from 60 to 90.
r = 0.816% n = (90-60) * 12 PMT = $4000 So the PV = $1,247,329.99
So this is how much I would need when I retire, so now I need to know how much to save.
Since Im saving weekly (52) I would need PMT
r = 0.0816 n= (60-25) * 52 FV = $1,247,329.99 PV=0
PMT = 298.23/week
Conversely, if wanted to find out what the monthly retirement income would be if I saved quarterly instead would the calculations be similar?