Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Assume $100,000.
Assume retired at age 70.
Estimate of yearly required withdrawals.
We'd like to see an estimate of how much we'd still have in the IRA at age 85.
Thanks.
Assume $100,000.
Assume retired at age 70.
Estimate of yearly required withdrawals.
We'd like to see an estimate of how much we'd still have in the IRA at age 85.
Thanks.
Going to need to know how you're invested to venture a guess on remaining balance at 85. What's your equity/bond allocation or lacking that, how much appreciation do you expect annually on remaining balance?
Assume $100,000.
Assume retired at age 70.
Estimate of yearly required withdrawals.
We'd like to see an estimate of how much we'd still have in the IRA at age 85.
Thanks.
You cant since it is dependent on each years balance…
If you started taking the MRD a few years ago you might be close to 100,000 now if you had a good investment mix. But if the market would have crashed for several years you could be down 50%.
Assume you take 4% of your balance out each year end and the portfolio earns 6% you will have about 138000 at 85. You would start with a 4000 withdrawal and at 85 it would be about 5,400. The growth is because you are earning 50% more than you are taking out.
If you had no earnings your balance would be about 50,000 and at 85 your would be taking out about 2200.
As you can see you need to add in your assumptions.
Note you will have less due to the MRD being higher than I used
If you started taking the MRD a few years ago you might be close to 100,000 now if you had a good investment mix. But if the market would have crashed for several years you could be down 50%.
Assume you take 4% of your balance out each year end and the portfolio earns 6% you will have about 138000 at 85. You would start with a 4000 withdrawal and at 85 it would be about 5,400. The growth is because you are earning 50% more than you are taking out.
If you had no earnings your balance would be about 50,000 and at 85 your would be taking out about 2200.
As you can see you need to add in your assumptions.
Note you will have less due to the MRD being higher than I used
You cant predict a balance when drawing out that 4% because sequence risk has a huge effect even at the same average return.
Milevsky calculated the same exact average return can have a 15 year difference over a 30 year retirement just based on the order of the gains and losses between the best sequence and the worst with the same exact average return
Last edited by mathjak107; 01-10-2022 at 10:24 AM..
You can see drawing 4% inflation adjusted will leave you with a huge difference in balance between the best outcomes and the worst .
Just look at this spread .. this is 50/50 as an allocation ..1,000,000 drawing 4% for 30 years
The lowest and highest portfolio balance at the end of your retirement was $-223,952 to $4,145,063, with an average at the end of $1,156,780.
FIRECalc Results
Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.
FIRECalc looked at the 121 possible 30 year periods in the available data, starting with a portfolio of $1,000,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 121 cycles.
The lowest and highest portfolio balance at the end of your retirement was $-223,952 to $4,145,063, with an average at the end of $1,156,780. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 6 cycles failed, for a success rate of 95.0%.
You plugin the current years info, get a result, then scroll down and there is a lifetime estimator based on a rate of return of your choice.
It asks for date of birth. RMDs will start at age 72. When you quit working or start Soc Sec is irrelevant.
For some people it is best to start withdrawals after age 60 but before age 72 to draw down the amount later subject to a Minimum. You control the amount of these early withdrawals.
Be sure to read the "assumptions" it uses. and at the bottom of webpage are several FAQs you should read.
Have fun..........
No one can predict their rate of return …how about if you did that in 2000 with the lost decade coming or in 1965 or 1966 with a stock market dead for 20 years.
Even if you guessed at the return the fact you are drawing it out in random good and bad years has sequences all over the map.
No one will know their balance until they get there or at least close
Just a footnote that financial advisors are terrible, they can’t add value and aren’t worth paying for. Well like attorneys you don’t need them until you need them and sometimes it’s too late
No one can predict their rate of return …how about if you did that in 2000 with the lost decade coming or in 1965 or 1966 with a stock market dead for 20 years.
Even if you guessed at the return the fact you are drawing it out in random good and bad years has sequences all over the map.
No one will know their balance until they get there or at least close
True, but the OP asked for a "rough" estimation.
(And I deleted my post as I shortly realized their Tables were not updated to latest.)
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
