IRA withdraw

Submitted by Bill Winters on Tue, 2020-02-04 04:33

I am 60 and have 375k in an IRA. Is there a link to a calculator to calculate how much I can withdraw now a month and have the money last 25years?



Submitted by Alan - IRA critic on Tue, 2020-02-04 16:17

  • Here is a basic calculator. A large difference results from your assumed rate of return. For example, if you assume 5% you would start with 21000 a year. But if you assume only 2% this drops to 15,000 a year. You should also enter an inflation factor so that your annual distributions grow with your assumed inflation rate.
  • https://www.mycalculators.com/ca/retcalc1m.html
  • Note that the traditional 4% of balance guideline also starts with 15000 a year. You increase that each year for inflation.

Submitted by Bill Winters on Thu, 2020-02-06 00:47

This is perfect. Thanks for the insight. I don’t have any knowledge of how the IRA works.  

Submitted by Alan - IRA critic on Thu, 2020-02-06 01:06

Note that this calculator will work regardless of whether your saving are in a retirement account or just a savings account. However, the taxes you will owe on IRA distributions will be higher because distributions are usually all taxable. From a savings account, only the interest would be taxable.

Submitted by Bill Winters on Thu, 2020-02-06 02:14

Thanks. How much interest can one expect from an IRA annually? If I am not putting any more money into the IRA and withdrawing every month. it still grows with interest correct?

Submitted by Alan - IRA critic on Thu, 2020-02-06 02:25

  • Depends on the type of investments held in your IRA. Typical investments are stocks, bonds, and mutual funds holding stocks or bonds. CDs can also be held as well as many other types of investments. Stocks produce the highest earnings but can also sustain serious losses. You can enter the rate of return into the calculator the reflects the type of investments you purchase. Current interest rates are low, mostly under 2%. So if you choose safe investments that will not lose much, you also cannot expect to gain much. A mix of investments may produce something around 5% long term, but that will have to include stocks or stock mutual funds.
  • Yes, even though you are withdrawing from the account, what is left in the account will continue to generate earnings from interest, cap gains, dividends etc.

Submitted by Bill Winters on Thu, 2020-02-06 02:36

I should open a Traditional IRA (transferred from a TSP in a divorce) with a hands-off investor?

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