﻿ Retirement Income Increasing by Inflation

Retirement Income Increasing by Inflation

# Example #1

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?

## 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

End of Period

Final Account Value

0

## Result

The account will generate \$781.97 per month. (Not too bad for \$200 per month savings over the same period of time.)

# Example #2

How much income will the account produce if the payments increase by 2.5% annually?

## Data Entry

Change Type of Distributions to Annually Increase by Percent and set Annual Increase in Distribution to 2.5%.

## Result

The account will produce an initial monthly income of \$608.98.

# Example #3

How much income will the account produce if the payments increase by 3% per year?

## Data Entry

Change the Annual Increase in Distribution to 3%.

## Results

The account will produce an initial monthly income of \$577.48