Free Wealth Management Guide Retirement Planning: What You Need To Know | Page 6

Inflation Adjusted Income and Investment
Returns

investment returns. The annual inflation rate and effective tax rate used in this example is 3.50% and 15%.

The chart on the next page illustrates how long $50,000
annual inflation adjusted distributions can be taken from
a $1 million IRA account with 4%, 6% and 8% annual

Based on this example, you can see that the accounts
earning 4%, 6% and 8% were exhausted in years 19, 24
and 33 respectively. Notice how the initial distribution of
$50,000 was equivalent to $161,043 in year 34.
Annual Investment Return

Annual Distribution

4%

6%

8%

($50,000)
($51,750)
($53,561)
($55,436)
($57,376)
($59,384)
($61,463)
($63,614)
($65,840)
($68,145)
($70,530)
($72,998)
($75,553)
($78,198)
($80,935)
($83,767)
($86,699)
($89,734)
($92,874)
($96,125)
($99,489)
($102,972)
($106,576)
($110,306)
($114,166)
($118,162)
($122,298)
($126,578)
($131,009)
($135,594)
($140,340)
($145,252)
($150,335)
($155,597)
($161,043)

$1,000,000
$981,176
$959,541
$934,910
$907,087
$875,869
$841,040
$802,373
$759,628
$712,553
$660,885
$604,344
$542,637
$475,456
$402,477
$323,359
$237,744
$145,254
$45,495
$0

$1,000,000
$1,001,176
$1,000,365
$997,373
$991,997
$984,016
$973,193
$959,275
$941,992
$921,052
$896,144
$866,937
$833,072
$794,170
$749,823
$699,595
$643,021
$579,603
$508,810
$430,074
$342,791
$246,312
$139,947
$22,961
$0

$1,000,000
$1,021,176
$1,041,988
$1,062,334
$1,082,102
$1,101,169
$1,119,399
$1,136,641
$1,152,733
$1,167,492
$1,180,721
$1,192,202
$1,201,698
$1,208,947
$1,213,665
$1,215,541
$1,214,235
$1,209,374
$1,200,555
$1,187,335
$1,169,234
$1,145,726
$1,116,241
$1,080,158
$1,036,799
$985,429
$925,249
$855,389
$774,905
$682,769
$577,868
$458,992
$324,828
$173,949
$4,809
$0

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