Retirement Distributions

A million dollars sounds like a lot of money to have when you retire. But, how long will that million actually last? Assume that you will take 4% out of your retirement savings until age 71. After age 71 you will take out based on the IRS schedule provided in columns J and K. The rest of your income will come from Social Security or other investments.

Note:

The average interest rate of return is expected to be 6.25%.

2.1

In cell C4, reference the savings balance in the Information Table.

32.2

In cell D4, calculate the withdrawal amount using the withdrawal percentage in the Information Table.

The withdrawal is made from the savings at the beginning of the year.

Copy and paste down to complete the column.

Note: The values will be zero until you complete column C.

32.3

In cell E4, calculate the balance after the withdrawal.

Copy and paste down to complete the column.

32.4

In cell C5, calculate the new Savings Balance.

The ending balance from the previous year and the expected interest return makeup the new Savings Balance.

Copy and paste down the column.

42.5

In cell C15, calculate the new Savings Balance with the expected interest.

The ending balance from the previous year and the expected interest return makeup the new Savings Balance.

32.6

In cell D15, calculate the withdrawal.

The withdrawal is made from the savings at the beginning of the year.

The withdrawal is the savings balance divided by the distribution period for that age.

Copy and paste down the column.

32.7

In cell E15, calculate the ending balance.

Copy and paste down the column.

32.8

In cell C16, calculate the savings balance with the expected interest.

Copy and paste down the column.

3

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