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Your aunt is 65 years old and has just retired with $750,000 in her IRA account...

Your aunt is 65 years old and has just retired with $750,000 in her IRA account She expects the investments in this account to earn a return of 8.5% each year. She also expects to live for 30 years in retirement. She plans to withdraw an equal amount from this account each year starting now and also plans to leave $50,000 to you in 30 years. How much can she withdraw per year from the account?

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Answer #1

She can withdraw $69,385.40 per year per workings below.

Particulars Values Reference
Rate             0.085 Annual return
Periods (Nper)                   30 Life expectancy
Present Value (PV) $7,50,000 Amount at the beginning of the period
Future Value (FV) $50,000 Amount at the end of the period
Yearly Payment (Pmt) $69,385.40 Using pmt function in excel =pmt(rate,nper,-pv,fv)

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