9. EASY STREET? You are now 35 years old and will retire at the age of 65. While you currently have no savings, you are

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9 Easy Street You Are Now 35 Years Old And Will Retire At The Age Of 65 While You Currently Have No Savings You Are 1 (44.33 KiB) Viewed 13 times

9. EASY STREET? You are now 35 years old and will retire at the age of 65. While you currently have no savings, you are going to start a personal investment plan now and learn that you can expect the following average annual retums in various investments: Investment Emerging stock market stocks Small-company U.S. stocks European and Asian stocks S&P 500 Index (large U.S. stocks) Art Residential real estate U.S. Corporate bonds Long-term U.S. govemment bonds Silver After-inflation return 9.0% 8.2% 7.2% 4.0% 2.8% 0.9% 0,4% -0.3% (a) If you invest $10,000 each year for the next 30 years in small-company stocks how much would you retire with (before taxes)? (b) Suppose you wanted to retire with enough to buy a 1,000 acre spread in the Hill Country with horses, a ranch house and a very large Winnebago ($6 million). If you were willing to put off retirement until 75 and set aside $10,000 each year, what investment categories could you have to be in to achieve this objective? (c) Suppose you were risk-averse and would only invest in long-term goverment bonds. How many years would you have to save at $10,000 a year to get that ranch?