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Pension: expected annual retirement income

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Delbert Ray is planning to retire this year and draw upon the accumulated saving in his pension plan, which amount to $205,800. Mr.Ray is vested with 80 percent of the accumulated funds and, based on his life expectancy, has been promised an annual annuity (income) rate of 3.5 percent. What is Delbert Ray's expected annual retirement income from his pension plan?

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This solution is comprised of an explanation of how to calculate expected annual retirement income.

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Jayant Kumar, MBA
Education
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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