﻿ How long will the money last?

How long will the money last?

# Example #1

A client has accumulated \$100,000 at retirement and wants to start taking payments of \$1,000 per month. They feel they can safely earn a 4.5% rate of return. How long will the money last?

Data Entry

Use the following values for the prompts:

## Value

Calculation Type

Distributions

Calculate

Number of Years

Current Account Value

100,000

Interest Rate

4.5

Type of Distribution

Level Withdrawals

Distributions per Year

12

Distribution Amount

1,000

Distributions Made at

End of Period

Final Account Value

0

Place the cursor on the # of Years prompt and click on the Calculate Cursor Line button.

## Result

Calculated Number of Years shows 10.4167.

# Example #2

How long will the money last if the payments increase by 2% per year?

## Data Entry

Change Type of Distributions to Annually Increase by Percent and set Annual Increase in Distribution to 2%.

## Result

Calculated Number of Years now shows 9.4167 years.

# Example #3

How long will the money last if the payments increase by 3% per year?

## Data Entry

Change the Annual Increase in Distribution to 3%.

## Results

Calculated Number of Years now shows 9.0833 years.