Overview

Planning for retirement is about figuring out what you'll need to save in order to supplement your retirement income or to know what future withdrawals you'll be able to make when you continue to save as you do now.

Example

You have $10,000 in a savings account on January 1st, 2025 and you intend to add $1,000 on July 1st each year for 25 years. As you'll earn more each year, annual deposits will increase by 3 %.

On January 1st, 2050 you'll start a series of 180 monthly withdrawals, which will increase by 2 % annually to compensate for inflation.

If your rate of return after taxes is 4 %, how much will be the first withdrawal?

Set up the following cashflow or select the Retirement withdrawals example in the Help > Eamples menu.

Date	Type	Amount	Occurs	#	Change	Step	Comment
1-1-2025	inflow	10,000	once				Initial deposit
1-1-2025	inflow	1,000	annually	25	3 %	1	Savings
1-1-2050	unknown	1	annually	180	2 %	12	Withdrawals

Enter 4 into the rate field and select annual compounding in Compute Options.
Make sure that Auto update is checked.

You'll find the anwser in the x Value field: -548.80. The schedule shows that withdrawals start at 548.80 and end at 724.13.

Change value of an unknown: percentage or factor?

In the above example the value of the unknown changes by a percentage, so that the calculated factor for the next occurence is 1.02, then 1.0404 (1.02 + 2 %), then 1.0612 (1.0404 + 2 %) and so on.

What if you want the value to change by a constant value that is 2 % of the calculated unknown like this: 1.02, 1.04, 1.06, ...?

To do this, you need to set the change type to factor. As the factor for the event is set at 1, and enter a value of 0.02.

Try applying this change and the x Value will become -554.12. The schedule shows that withdrawals start at 554.12 and end at 709.27, now the withdrawals change by a fixed amount of 11.08 and not by 2 %.

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