Please Help Me With This Math (Retirement Living)

[Debbie]

I give up!

I've always said that math is not my forte. Yet, I do monthly billings, payments, etc with success. Go figure....

Back to the topic...

I'm just trying to figure out, in a simple way, on what amount Jeff and I can live comfortably during our retirement years.

I want to disregard our RE portfolios. I want to treat our RE portfolios as the icing on the cake.

I want to figure out what our cake (401K) would be enough for us to live comfortably.

For example: 401K is $1 million dollars. Leaving the principal in, assuming a single digit interest (let's pick number 5)----is it based on compounded daily? Monthly? Annually? :SM032:

I'm going to guess it's annually. So----how do I do the math?

Would someone help this poor math deficient damsel in distress? :SM106:

[mike_mn]

I give up!

I've always said that math is not my forte. Yet, I do monthly billings, payments, etc with success. Go figure....

Back to the topic...

I'm just trying to figure out, in a simple way, on what amount Jeff and I can live comfortably during our retirement years.

I want to disregard our RE portfolios. I want to treat our RE portfolios as the icing on the cake.

I want to figure out what our cake (401K) would be enough for us to live comfortably.

For example: 401K is $1 million dollars. Leaving the principal in, assuming a single digit interest (let's pick number 5)----is it based on compounded daily? Monthly? Annually? :SM032:

I'm going to guess it's annually. So----how do I do the math?

Would someone help this poor math deficient damsel in distress? :SM106:

Deb,
It seems your question is relativly simple since there is little/no compounding. If you are drawing out just the interest earned every month, there is no compounding effect like there is currently as you continue to grow the asset.

5% of 1M is 50k per year. Don't forget that is before taxes.

Hope this helps.

[Debbie]

Thanx guys....it confirmed my thoughts.

It kinda sucks. It's like, what's the purpose of having the 401k other than "hey, man--let's watch it grow!".

[SlumLordMike]

B17 Sinking Fund
B18 Future Value $1,000,000.00
B19 Annual Rate (Inflation) 2.00%
B20 Compoundings/Year (payments) 1
B21 Years 30
B22 Periodic Payment $24,649.92

Using the A column of your Excel Spreadsheet for you descriptions and using the B column for your digits, this will show you what you need to have to fight inflation, but it ignores interest earned. I'd have to go back to college to figure that in.

Here is your formula:
=B18*(B19/B20)/((1+B19/B20)^(B20*B21)-1)

[SlumLordMike]

Now, if your goal is to leave the $1,000,000 to the kids well then you need to have about $2,000,000 to deal with the wealth redistribution the democrats intend to bring back once Clin-Bama is in the White House next year.

Monica Lewinski's former boyfriend's wife for President. Oh Yay! :SM099:

[Debbie]

B17 Sinking Fund
B18 Future Value $1,000,000.00
B19 Annual Rate (Inflation) 2.00%
B20 Compoundings/Year (payments) 1
B21 Years 30
B22 Periodic Payment $24,649.92

Using the A column of your Excel Spreadsheet for you descriptions and using the B column for your digits, this will show you what you need to have to fight inflation, but it ignores interest earned. I'd have to go back to college to figure that in.

Here is your formula:
=B18*(B19/B20)/((1+B19/B20)^(B20*B21)-1)

:SM032: .

[SlumLordMike]

Start on line 17 to avoid the conversion. LOL

You can delete the first 16 lines after you save the spreadshiite.

[Debbie]

Money management during retirement is completely different than the working years. I encourage you to get your hands on "Buckets of Money" by Ray Lucia because it shows you the right way to figure out how to draw down interest and principle in retirement based on sound actuarial data.

Now, if your goal is to leave the $1,000,000 to the kids well then you need to have about $2,000,000 to deal with the wealth redistribution the democrats intend to bring back once Clin-Bama is in the White House next year.

Hey! Thanx for the book suggestion! I still have my Barnes and Noble gift cards....

*sighs* I know about the Democrats. Surely, there's enough people at the congress to override Clin-Oba's plans?....I still don't know which party to vote for....or, not vote at all.

[topfuel]

I give up!

I've always said that math is not my forte. Yet, I do monthly billings, payments, etc with success. Go figure....

Back to the topic...

I'm just trying to figure out, in a simple way, on what amount Jeff and I can live comfortably during our retirement years.

I want to disregard our RE portfolios. I want to treat our RE portfolios as the icing on the cake.

I want to figure out what our cake (401K) would be enough for us to live comfortably.

For example: 401K is $1 million dollars. Leaving the principal in, assuming a single digit interest (let's pick number 5)----is it based on compounded daily? Monthly? Annually? :SM032:

I'm going to guess it's annually. So----how do I do the math?

Would someone help this poor math deficient damsel in distress? :SM106:



Everything is relative of course but I've always heard that one needs at least Two Million in assets to throw off enough interest in our declining years.
If that's the case...I only need to do 8 more short sales.