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Thanks! I like the idea of a chart for annual rates of return. The withdrawal rate is a little tricky. The withdrawal rate is the percentage of your retireme

by kablamo 14y ago

Thanks! I like the idea of a chart for annual rates of return. The withdrawal rate is a little tricky. The withdrawal rate is the percentage of your retirement nest egg you will be spending each year. If you decrease your withdrawal rate you will need to save a bigger lump sum to compensate for the smaller amount of income you are generating. Therefore it will take longer for you to retire.

dheller 14y ago
Oh I see, because you've fixed retirement expenses to equal working expenses. Thanks for the clarification
danielhughes 14y ago
It would be helpful to see at what age you will run out of money for a given withdrawal rate. Without that it's difficult to know what rate of withdrawal to enter.
- kablamo 14y ago
  The calculator assumes you never want to draw down your nest egg -- ie your savings will only grow larger. It also assumes you will spend the same amount in retirement that you spend now. Your rate of withdrawal is pretty much a wild guess as it depends on your rate of return, taxes in the future and inflation in the future. Historically 4% has been a good bet. See this article for a summary of this topic: http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/ http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need... and this article for more in depth writing: http://financialmentor.com/free-articles/retirement-planning/how-much-to-retire/are-safe-withdrawal-rates-really-safe http://financialmentor.com/free-articles/retirement-planning...