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 March 1st, 2012, 10:26 PM #1 Newbie   Joined: Feb 2012 Posts: 8 Thanks: 0 Help for finding calculator formula Hi Friends, I am finding formula for, " How Long Will My Money Last With Systematic Withdrawals? " http://calcxml.com/calculators/bud05?skn=#results . I tried to find out formula but unable to find it. Looking for someone help. Thanks in advance. Thank You, Rahul Barge
 March 1st, 2012, 11:03 PM #2 Senior Member   Joined: Jan 2012 Posts: 131 Thanks: 0 Re: Help for finding calculator formula Thanks. Good one especially for old man like me.
 March 2nd, 2012, 12:06 AM #3 Senior Member   Joined: Apr 2011 From: USA Posts: 782 Thanks: 1 Re: Help for finding calculator formula I don't understand. You want help finding a calculator, while you give a link to such a calculator. ??? Although I don't like that it's forcing monthly withdrawals, and watch the tax thing -- it's making an assumption that the only way to invest is something that pays interest, which is taxable at your normal bracket's rate. (Not to mention that it's assuming U.S. taxes while the rest of the math works anywhere.)
 March 2nd, 2012, 12:54 AM #4 Newbie   Joined: Feb 2012 Posts: 8 Thanks: 0 Re: Help for finding calculator formula Actually I have found this calculator, but I want to know what formula is written for this calculator? Thank you, Rahul Barge
 March 2nd, 2012, 06:25 AM #5 Math Team   Joined: Oct 2011 From: Ottawa Ontario, Canada Posts: 14,597 Thanks: 1038 Re: Help for finding calculator formula No mystery! It's a simple calculator of "n" (number of payments) given a present value amount, payment amount and monthly interest rate. Monthly interest rate is (savings rate) - (savings rate * tax rate); if savings rate = 12% and tax rate = 25%, then: 12 - 12(25/100) = 9%, that then divided by 1200 to get monthly: 9/1200 = .0075 FORMULA (with 15000-200-net9% as example): n = number of payments (?) A = present value (15000) P = monthly payment (200) i = interest monthly (.0075) n = LOG[P / (P - Ai)] / LOG(1 + i) n = LOG[200 / (200 - 15000*.0075)] / LOG(1.0075) = 110.63663... (so not quite 111 months). 110.63663... = ~22,127 : try it in that "calculator" of yours and that's what you'll get!
 March 2nd, 2012, 08:39 PM #6 Newbie   Joined: Feb 2012 Posts: 8 Thanks: 0 Re: Help for finding calculator formula Hi Denis, Thank you for your reply, i will check for that formula. Thank you, Rahul Barge
March 3rd, 2012, 01:36 AM   #7
Newbie

Joined: Feb 2012

Posts: 8
Thanks: 0

Re: Help for finding calculator formula

Quote:
 Originally Posted by Denis No mystery! It's a simple calculator of "n" (number of payments) given a present value amount, payment amount and monthly interest rate. Monthly interest rate is (savings rate) - (savings rate * tax rate); if savings rate = 12% and tax rate = 25%, then: 12 - 12(25/100) = 9%, that then divided by 1200 to get monthly: 9/1200 = .0075 FORMULA (with 15000-200-net9% as example): n = number of payments (?) A = present value (15000) P = monthly payment (200) i = interest monthly (.0075) n = LOG[P / (P - Ai)] / LOG(1 + i) n = LOG[200 / (200 - 15000*.0075)] / LOG(1.0075) = 110.63663... (so not quite 111 months). 110.63663... = ~22,127 : try it in that "calculator" of yours and that's what you'll get!

Hi,

Thats great it works..

Just i want to know that when i gave input

Current savings balance ($) = 15000 Proposed monthly withdrawal amounts ($) = 200

Annual withdrawal increases (if any): (%) = 0%

Annual before-tax return on savings: (%) = 12%

Federal marginal tax bracket: (%) = 25%

Desired amortization schedule = monthly

Result is 100% correct here :-

Your money will last approximately 9.3 years with systematic withdrawals totalling $22,127 But when i give input Annual withdrawal increases (if any): (%) = 1% Then Results is as follow Your money will last approximately 8.8 years with systematic withdrawals totalling$21,807

I tried for that what actually happens but didn't get it Answer.

Thank you,
Rahul Barge

March 3rd, 2012, 05:27 AM   #8
Math Team

Joined: Oct 2011

Posts: 14,597
Thanks: 1038

Re: Help for finding calculator formula

Quote:
 Originally Posted by rahulbarge ...... But when i give input Annual withdrawal increases (if any): (%) = 1% Then Results is as follow Your money will last approximately 8.8 years with systematic withdrawals totalling \$21,807 I tried for that what actually happens but didn't get it Answer.
Depends....did you specify annual payments?

The fact that total reduces from 22,127 to 21,807 is due to the money being withdrawn faster, of course.

The formula is quite similar...I'll refer you here (too lazy to type it out!):
http://www.financeformulas.net/Growing- ... Value.html

Just a word of caution: if you're trying to "see" what goes on, but have different frequencies
(like monthly payment but annual increases), then you're asking for trouble!
Not "trouble" really (joking) but the calculations/formulas are accordingly more complicated.

 September 26th, 2015, 02:53 AM #9 Newbie   Joined: Sep 2015 From: Toronto Posts: 1 Thanks: 0 Math Focus: algebra If you invest in a portfolio balanced between stocks and bonds, withdraw four percent each year for retirement income and give yourself an annual raise to account for inflation, there's a roughly 90 percent chance that your money will last for at least 30 years. Hence, the justification for the so-called four percent rule. The four percent rule is actually a good starting point for considering an appropriate withdrawal rate. But if you fall into one of the following two categories, you might want to consider withdrawing amounts of less than four percent: If your retirement investments are actively managed and incur investment expenses of more than 50 basis points (0.50 percent), over the long run you may fall short of the net rates of return that justify the four percent rule. If you're married, both you and your spouse are healthy, and you retire in your early to mid sixties, there's a good chance that one of you will live for more than 30 years. If either of these statements applies to you, you may want to consider payout rates on your retirement income of three or three and a half percent. 401(k) Retirement Savings Calculator - Save For Retirement?
 September 26th, 2015, 06:34 AM #10 Math Team   Joined: Oct 2011 From: Ottawa Ontario, Canada Posts: 14,597 Thanks: 1038 Not quite...they need to pay your fees !

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