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Note: - Withdrawals are made at the beginning of the year.
- Due to rounding, the calculations are approximate and intended to be used only as a guide.
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EXAMPLE CALCULATIONS:
The assumptions:- You're 40 years old and would like to retire at 55 (in 15 years). Your spouse will retire with you.
You and your spouse currently have $50,000 in a taxable account that you're no longer adding to. You also have $200,000 in IRAs (between you and your spouse) and will continue to contribute $4000 ($2000 each spouse) each year until you retire at 55. You're earning 10% per year on your taxable and IRA money and expect that to continue.
You just used my Savings Calculator and found that you will have $1,171,401.97 (between your taxable account and IRAs) in 15 years.
You are also contributing to a 401(k) and after using my 401(k) Calculator found it will be worth about $120,000 by the time you retire at 55.
So, in 15 years you'll have saved about $1,291,401.97. You think you can earn 8% per year in retirement and assume inflation will average 3.5% per year. You want the money to last for
35 years with nothing left for heirs after that time.
- 15 = Years until you retire (age 40 to age 55)
- 35 = Years of retirement
- 8 = Interest Rate
- 3.5 = Inflation Rate
- 1,291,401.97 = amount saved at time of retirement
- 0 = amount left
Press View Schedule You will be able to withdraw the equivalent of $41,467.17 (in todays $) each year - adjusting for inflation (see schedule). (Assuming all the above assumptions are met, of course.)
-- Remember, any Social Security benefits and/or Pension benefits will be added to that income. --
FAQs:
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