Project #30168 - Retirement Plan Alternatives

Jerry Scott has recently accepted a position with a state agency that has a retirement pension plan that requires joint contributions by the employee and the employer. Jerry is now ten years from the retirement age of 65 and expects to contribute $400 per year to the plan, which will make him eligible for payments of $1,000 per year for the remainder of his life, beginning at the age of 65. Jerry's retirement plan is optional; therefore, he is considering the alternative to invest annually an amount equal to his $400 per year contribution. If Jerry assumes his investments would earn 8 percent annually, and his life expectancy is 80 years, should he invest in his own plan or should he make contributions to his employer's fund?

Examine both alternatives and make a recommendation. Show all calculations and explain your reasons. State any assumptions you make.

Present your work as a 2-page report in a Word document formatted in APA style.

Subject Business
Due By (Pacific Time) 05/16/2014 12:00 pm
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