Accumulation and Distribution Example

A 25 year old client spends $50 a week on coffee and a couple lunches. They might consider saving it for retirement but do not think it would be worth much. How much monthly income could $50 a week produce for 25 year old when they are 65?

Data Entry

Use the following values for the prompts:



Calculation Type

Accum. & Dist

Accumulation Values

Current Account Value


Interest Rate


Number of Years


Type of Distribution

Level Deposits

Deposits per Year


Deposit Amount


Distributions Made at

End of Period

Calculated Projected Value


Distribution Values


Distribution Amount

Interest Rate


Number of Years


Type of Distribution

Level Withdrawals

Distributions per Year


Distributions Made at

End of Period

Future Value


Calculated Withdrawal Amount


In summary, with no lump sum deposit, the $50 per week of frill expenses at a relatively conservative rate of return can produce $2,194 of income per month in retirement--not a bad investment!

This example could easily be modified:

1.Include annual increasing the deposit by 2% to 3%;

2.Include a COLA of a similar value to the distribution time period; and

3.Changes to the accumulation and/or distribution time period.

Other assumptions could also be easily changed.

Sales IdeaWhen working with young individuals, or groups of younger individuals, this powerful tool use to run an illustration for the younger people--the very people who are often less included to make contributions!