Russell and Charmin have current living expenses of $84 comma 830 a year. Estimate the present value amount of income they will need to maintain their level of living in retirement. Assume an average tax rate of 26 percent and a(n) 76 percent income replacement ratio.

$87,122.70

Step-by-step explanation:

Given:

Income replacement ratio= 76%

Average tax rate= 26%

Current salary = $84,830

Since Rusell and Charmin present income is $84,830 and they want to estimate their retirement need with respect to current expense.

Since present income is $84,340 and they are willing to replace with 76% of the present income, the new required income will be:

New annual need = Current salary * 76%

Therefore, we have:

$84830 * 0.76 = 64,470.8

To find the present value amount of income, we have:

New annual need / ( 1 - average tax rate)

= 64470.8 / (1 - 0.26)

= $87,122.70

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step-by-step explanation: