Question: Question 13 (Multiple Choice Worth 1 Points)\n(Planning for Retirement LC)\n\nAn electrician's current annual gross wage is $78,000. For retirement, the electrician wants to have enough saved to live off 80% of the current annual gross wage and draw 4% the first year. What is the total amount the electrician will need in retirement savings to meet their retirement income goal?\n\n$1,900,000\n\n$2,496,000\n\n$1,650,000\n\n$1,560,000
1. **State the problem:**\n\nAn electrician earns $78,000 annually. They want to retire with enough savings to withdraw 4% in the first year, which should equal 80% of their current annual wage. We need to find the total retirement savings required.\n\n2. **Identify the formula:**\n\nThe withdrawal amount in the first year is 4% of the total savings. Let the total savings be $S$.\n\nThe desired annual retirement income is 80% of $78,000$, which is:\n$$0.80 \times 78000 = 62400$$\n\nThe withdrawal formula is:\n$$0.04 \times S = 62400$$\n\n3. **Solve for $S$: **\n\n$$S = \frac{62400}{0.04}$$\n\n4. **Show intermediate step with cancellation:**\n\n$$S = \frac{62400}{\cancel{0.04}} \times \frac{\cancel{1}}{1} = 62400 \times 25$$\n\n5. **Calculate:**\n\n$$S = 62400 \times 25 = 1560000$$\n\n6. **Interpretation:**\n\nThe electrician needs $1,560,000 in retirement savings to meet their income goal.\n\n**Final answer:** $1,560,000