Jack is getting ready to retire. He has a salary of $100,000 and is saving 15% a
ID: 458470 • Letter: J
Question
Jack is getting ready to retire. He has a salary of $100,000 and is saving 15% annually in his 401(k) plan and he just made his last principal and interest monthly payment on his mortgage of $2,350. His home is now debt free. What would you recommend regarding a wage replacement ratio, assuming he wants to maintain his lifestyle plan and he just made his last principal and interest monthly payment on his mortgage of $2,350. His home is now debt free. What would you recommend regarding a wage replacement ratio, assuming he wants to maintain his lifestyle.
85%.
77%.
70%.
50%.
Explanation / Answer
The correct choice is A : 85%
Explanation : - Jack is free from his home mortgage and his pre-retirement income was $ 82,250 after paying for his 401(k) plan and mortage . Now Jack's home is debt free , therefore Jack's wage replacement ratio is 85% assuming he wants to maintain his lifestyle.
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