How much can I safely withdraw from my retirement savings without running out of money? Is there a formula?

Posted by Retirement Advisor
retirement
goodguy9544 asked:


I am planning on an early retirement and need to know what portion of my nest egg I can use to supplement my other sources of income without fear that I will end up with zero. I have another 40-50 years of life expectancy and plan to continue to invest the remaining balance as I make once-a-year withdrawals.

GREG
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This entry was posted on Tuesday, October 14th, 2008 at 1:03 pm and is filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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3 Responses to “How much can I safely withdraw from my retirement savings without running out of money? Is there a formula?”

  1. Kathryn Says:
    October 16th, 2008 at 10:22 pm

    There are a lot of retirement withdrawal calculators out there. Here’s a link to one of them. Hope this helps.

  2. goofycollector Says:
    October 17th, 2008 at 6:55 pm

    I would check out the online calculators as well. The number my broker says is 8% of the gross. That’s assuming you are earning 15% on your money and inflation of 5%. The goal should be to not touch your principal. If you run the numbers and start hitting your principal, you will be in trouble, unless you have a TON of assets in your retirement plan. 40-50 years is a long time, you would need millions, I would think. Perhaps you can supplement your income with a small part time job instead of tapping your retirement. You also don’t say how old you are, you’ll pay penalties depending on the plan if you try and withdraw prior to 59 1/2.
    Here are some calculators I found

    Kiplingers is my favorite site for $$ issues

    Good luck, and happy retirement

  3. Steve R Says:
    October 21st, 2008 at 1:46 am

    You can go to a fee-only financial planner who can run the Monte carlo analysis of your savings to see if you won’t run out of money at retirement.