First read the front page article in the October 2007 Newsletter. Then look at the table below and these notes.
This table is constructed from the Excel spreadsheet that was prepared by Elliot Auerbach and is available for downloading.
It illustrates what happens if you start with $100,000 in your retirement account and take the Minimum Distribution from it yearly. It accounts for both earnings and inflation in a simple "first approximation".
The expenditures column is the amount of income needed for living expenses - other parameters are listed below.
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Annuity Values as Depleted by Required Minimum Distribution
Expenditures are $4,000 per $100,000 escalated for inflation.
Earnings rate is always set to 6%.
The inflation rate is always set to 3.3%
|
Age |
Beginning Of Year Balance |
Minimum Required Distribution |
Earnings |
End of Year Balance |
Expenditures (Escalated) |
Excess or Deficit |
Inflation Escalator |
|
70 |
$100,000.00 |
$3,649.64 |
$5890.51 |
$102,240.88 |
$4,000.00 |
$-350.36 |
1.000 |
|
71 |
$102,240.88 |
$3,858.15 |
$6018.71 |
$104,401.44 |
$4,132.00 |
$-273.85 |
1.033 |
|
72 |
$104,401.44 |
$4,078.18 |
$6141.74 |
$106,465.00 |
$4,268.36 |
$-190.17 |
1.067 |
|
73 |
$106,465.00 |
$4,310.32 |
$6258.59 |
$108,413.26 |
$4,409.21 |
$-98.89 |
1.102 |
|
74 |
$108,413.26 |
$4,555.18 |
$6368.14 |
$110,226.23 |
$4,554.72 |
$0.46 |
1.139 |
|
75 |
$110,226.23 |
$4,813.37 |
$6469.17 |
$111,882.03 |
$4,705.02 |
$108.35 |
1.176 |
|
76 |
$111,882.03 |
$5,085.55 |
$6560.36 |
$113,356.83 |
$4,860.29 |
$225.26 |
1.215 |
|
77 |
$113,356.83 |
$5,347.02 |
$6641.00 |
$114,650.81 |
$5,020.68 |
$326.34 |
1.255 |
|
78 |
$114,650.81 |
$5,647.82 |
$6709.61 |
$115,712.60 |
$5,186.36 |
$461.46 |
1.297 |
|
79 |
$115,712.60 |
$5,933.98 |
$6764.74 |
$116,543.36 |
$5,357.51 |
$576.47 |
1.339 |
|
80 |
$116,543.36 |
$6,232.27 |
$6805.63 |
$117,116.73 |
$5,534.31 |
$697.96 |
1.384 |
|
81 |
$117,116.73 |
$6,542.83 |
$6830.72 |
$117,404.61 |
$5,716.94 |
$825.90 |
1.429 |
|
82 |
$117,404.61 |
$6,865.77 |
$6838.30 |
$117,377.15 |
$5,905.60 |
$960.17 |
1.476 |
|
83 |
$117,377.15 |
$7,201.05 |
$6826.60 |
$117,002.70 |
$6,100.48 |
$1,100.57 |
1.525 |
|
84 |
$117,002.70 |
$7,548.56 |
$6793.70 |
$116,247.84 |
$6,301.80 |
$1,246.76 |
1.575 |
|
85 |
$116,247.84 |
$7,854.58 |
$6739.23 |
$115,132.49 |
$6,509.76 |
$1,344.83 |
1.627 |
|
86 |
$115,132.49 |
$8,165.42 |
$6662.99 |
$113,630.05 |
$6,724.58 |
$1,440.85 |
1.681 |
|
87 |
$113,630.05 |
$8,479.85 |
$6563.41 |
$111,713.60 |
$6,946.49 |
$1,533.36 |
1.737 |
|
88 |
$111,713.60 |
$8,796.35 |
$6438.93 |
$109,356.18 |
$7,175.72 |
$1,620.62 |
1.794 |
|
89 |
$109,356.18 |
$9,113.02 |
$6287.98 |
$106,531.15 |
$7,412.52 |
$1,700.49 |
1.853 |
|
90 |
$106,531.15 |
$9,344.84 |
$6111.52 |
$103,297.83 |
$7,657.14 |
$1,687.70 |
1.914 |
|
91 |
$103,297.83 |
$9,564.61 |
$5910.93 |
$99,644.15 |
$7,909.82 |
$1,654.79 |
1.977 |
|
92 |
$99,644.15 |
$9,769.03 |
$5685.58 |
$95,560.70 |
$8,170.85 |
$1,598.19 |
2.043 |
|
93 |
$95,560.70 |
$9,954.24 |
$5435.01 |
$91,041.47 |
$8,440.48 |
$1,513.75 |
2.110 |
|
94 |
$91,041.47 |
$10,004.56 |
$5162.35 |
$86,199.26 |
$8,719.02 |
$1,285.54 |
2.180 |
|
95 |
$86,199.26 |
$10,023.17 |
$4871.26 |
$81,047.36 |
$9,006.75 |
$1,016.42 |
2.252 |
|
96 |
$81,047.36 |
$10,005.85 |
$4562.67 |
$75,604.17 |
$9,303.97 |
$701.88 |
2.326 |
|
97 |
$75,604.17 |
$9,947.92 |
$4237.81 |
$69,894.07 |
$9,611.00 |
$336.92 |
2.403 |
|
98 |
$69,894.07 |
$9,844.24 |
$3898.32 |
$63,948.15 |
$9,928.17 |
$-83.93 |
2.482 |
|
99 |
$63,948.15 |
$9,544.50 |
$3550.55 |
$57,954.21 |
$10,255.79 |
-$711.29 |
2.564 |
|
100 |
$57,954.21 |
$9,199.08 |
$3201.28 |
$51,956.41 |
$10,594.24 |
-$1,395.16 |
2.649 |
|
101 |
$51,956.41 |
$8,806.17 |
$2853.20 |
$46,003.43 |
$10,943.85 |
-$2,137.68 |
2.736 |
|
102 |
$46,003.43 |
$8,364.26 |
$2509.28 |
$40,148.45 |
$11,304.99 |
-$2,940.73 |
2.826 |
|
103 |
$40,148.45 |
$7,720.86 |
$2177.28 |
$34,604.88 |
$11,678.06 |
-$3,957.20 |
2.920 |
|
104 |
$34,604.88 |
$7,062.22 |
$1864.43 |
$29,407.08 |
$12,063.43 |
-$5,001.21 |
3.016 |
|
105 |
$29,407.08 |
$6,534.91 |
$1568.38 |
$24,440.55 |
$12,461.53 |
-$5,926.62 |
3.115 |
|
106 |
$24,440.55 |
$5,819.18 |
$1291.86 |
$19,913.23 |
$12,872.76 |
-$7,053.58 |
3.218 |
|
107 |
$19,913.23 |
$5,105.96 |
$1041.62 |
$15,848.89 |
$13,297.56 |
-$8,191.60 |
3.324 |
|
108 |
$15,848.89 |
$4,283.48 |
$822.43 |
$12,387.84 |
$13,736.38 |
-$9,452.89 |
3.434 |
|
109 |
$12,387.84 |
$3,643.48 |
$633.97 |
$9,378.32 |
$14,189.68 |
-$10,546.20 |
3.547 |
|
110 |
$9,378.32 |
$3,025.26 |
$471.94 |
$6,825.00 |
$14,657.94 |
-$11,632.67 |
3.664 |
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Posted Nov. 29, 2007. Second version