Your father now has $1,000,000 invested in an account that pays 9.00%. He expects inflation to average 3%, and he wants to make annual constant dollar (real) beginning-of-year withdrawals over each of the next 20 years and end up with a zero balance after the 20th year.
How large will his initial withdrawal (and thus constant dollar (real) withdrawals) be?© BrainMass Inc. brainmass.com October 17, 2018, 1:17 am ad1c9bdddf
The solution explains how to calculate the amount of annual withdrawals given the initial investment
Retirement savings, maximum annual withdrawal
You plan to have $750,000 in savings and investments when you retire at age 60. Assuming that you earn an average of 9 percent on this portfolio, what is the maximum annual withdrawal you can make over a 25 year period of retirement?View Full Posting Details