Retirement Income Increasing by Inflation
A client has been faithfully saving $200 per month for 25 years and earned a 6% rate of return. Their account balance is now $135,257. How much monthly income can the client receive if they anticipate a 5% rate of return over their life expectancy of 25 years?
Prompt 
Value 

Type of Fund 
Account Distributions 

Calculate 
Withdrawal Amount 

Current Account Value 
$135,257 

Interest Rate 
5 

% 
Number of Years 
25 
Type of Distribution 
Level Withdrawals 

Distributions per Year 
12 

Distributions Made at 
End of Period 

Final Account Value 
0 
The account will generate $781.97 per month. (Not too bad for $200 per month savings over the same period of time.)
How much income will the account produce if the payments increase by 2.5% annually?
Change Type of Distributions to Annually Increase by Percent and set Annual Increase in Distribution to 2.5%.
The account will produce an initial monthly income of $608.98.
How much income will the account produce if the payments increase by 3% per year?
Change the Annual Increase in Distribution to 3%.
The account will produce an initial monthly income of $577.48