Required return question
Trying to solve this question, any help would be greatly appreciated…
Sam Smith is 50 years old and will be retiring in 2 years. He currently earns 1M/year and his lifestyle expenses are $400,000 per year. Once retired, his income will reduce to $150k/year.
His current portfolio consists of assets worth $4.5M. What is his required return if he expects to live until 80 years old?
Assume Sam Smith would like 250k (400k - 150k) in real terms (inflation adjusted) per year
Thank you for any help
Study together. Pass together.
Join the world's largest online community of CFA, CAIA and FRM candidates.