Grady wants to replace 90 percent of his current net income. What is his annual need in​ today’s dollars?

Grady​ Zebrowski, age​ 25, just graduated from​ college, accepted his first job with a $47,000 ​salary, and is already looking forward to retirement in 40 years. He assumes a 2.3 percent inflation rate and plans to live in retirement for 20 years. He does not want to plan on any Social Security benefits. Assume Grady can earn a 8 percent rate of return on his investments prior to retirement and a 7 percent rate of return on his investments​ post-retirement to answer the following questions using your financial calculator.

a.  Grady wants to replace 90 percent of his current net income. What is his annual need in​ today’s dollars?

b.  Grady thinks he might have an average tax rate of 13 percent at retirement if he is married. Adjusting for​ taxes, how much does Grady really need per​ year, in​ today’s dollars?

c.  Adjusting for​ inflation, how much does Grady need per year in future dollars when he begins retirement in 40 ​years?

d.  If he needs this amount for 20 ​years, how much does he need in total for​ retirement?​ (Hint: Use the​ inflation-adjusted rate of​ return.)

e.  How much does Grady need to save per month to reach his retirement goal assuming he does not receive any employer match on his retirement ​savings?