Chartered Retirement Planning Counselor (CRPC) Practice Exam 2025 – Comprehensive All-in-One Guide for Exam Success!

To determine how much capital Mary needs to provide an annual retirement income of $60,000 for 30 years with a 3% inflation rate, we need to account for the diminishing purchasing power of money due to inflation. The correct answer takes into account both the need for a fixed amount of income and the effect of inflation over the retirement period.

First, we calculate the future value of $60,000 adjusted for 3% inflation over the 30 years. This means that each year, the amount required will increase in order to maintain the same purchasing power. The future value can be calculated using the formula for the future value of an annuity that incorporates inflation.

Second, we consider the total income needed over the 30 years. Using a suitable withdrawal method, often modeled using a present value of annuity formula, Mary will need to consider how much she would need today to be able to withdraw her required annual income adjusted for inflation.

Calculating this properly, the amount Mary would need to save so she could withdraw $60,000 annually, while considering inflation raising the required amount each year, would lead to the figure marked as the correct answer.

Thus, $890,589 represents the capital required so that Mary can withdraw the