Enduring Nest Egg

Michael Sheehan

Physician's Money Digest, October15 2003, Volume 10, Issue 19

One solution

If you're trying to figure out howmuch you need in your retirement kittyto last through your lifetime, here'ssome helpful math. Say you have a $1-million portfolio that's earning 7.3%and you take out $40,000 in the firstyear of your retirement, upping thetakeout each year to adjust for inflation.Using that scenario, the odds are6-to-1 that you will outlive your moneyafter 30 years. If you increase the first-yeartakeout to $50,000, you run a 1-in-3 chance of going broke in 30 years.: An immediate fixedannuity that guarantees a monthlycheck no matter how long you live maybe worth a look. If you're currently age65, you can buy a $1-million single-premiumfixed annuity and receive about$5000 a month in income guaranteedfor as long as you live.