You have $20,000 in your retirement fund that is earning 5.5 percent per year, compounded quarterly.

a.How many dollars in withdrawals per month would reduce this nest egg to zero in 20 years? UseExhibit 14-7.

b.How many dollars per month can you withdraw for as long as you live and still leave this nest egg intact? UseExhibit 14-7.

Exhibit 14 - 7 Dipping into Your Nest Egg YOU CAN REDUCE YOUR NEST EGG TO ZERO BY WITHDRAWING THIS MUCH EACH MONTH FOR THE STATED NUMBER OF YEARS Or You Can Withdraw This Starting Much Each Month Amount of and Leave You Nest Egg Years Years Years Years Years Nest Egg Intact $ 10 000 $ 107 $ 81 $ 68 $ 61 $ 56 $ 46 5000 161 121 20.000 215 162 121 25000 269 202 152 140 715 30.000 322 243 204 182 168 138 40.000 430 272 272 243 224 184 50.000 537 404 340 304 281 230 60.000 645 485 408 364 3 37 210 80.000 859 647 54 4 486 4 49 368 100.000 1074 808 680 607 561 460 NOTE : Based on an interest rate of 5 .5 percent per year , compounded quarterly ource : Select Committee on Aging , U.S . House of Representative