Cracking your nest egg

Kiplinger's Personal Finance Magazine, Oct, 1998 by Ronaleen R. Roha

* Then find 4% in the left column and read across the row to see how long the pool will last at different earnings rates. For example, if your pretax rate of return is 7%, your assets will last more than 50 years.

And that's great news. It means you can afford to improve the quality of your life. You could start with a 5% withdrawal rate ($35,000 instead of $29,000) and still expect the money to last 36 years, assuming a 7% annual return.

Number of years to deplete your nest egg

With-                      RATE OF RETURN
drawal  1%   2%   3%   4%   5%   6%   7%   8%   9%   10%   11%   12%
12%      7    8    8    8    8    9    9   10   10   11    12    13
11       8    8    9    9    9   10   10   11   12   13    14    15
10       9    9   10   10   10   11   12   13   14   15    17    19
 9      10   10   11   11   12   13   14   15   16   18    21    26
 8      11   11   12   13   14   15   16   18   20   24    30     *
 7      12   13   14   15   16   18   20   22   27   36     *     *
 6      14   15   16   18   19   22   25   31   44    *     *
 5      17   18   20   22   24   29   36    *    *    *
 4      20   22   25   28   33   42    *    *    *
 3      25   28   33   39    *    *    *    *
 2      35   40   50    *    *    *    *
 1       *    *    *    *    *    *

* = more than 50 years