The balances in the reports reflect the end of the year.

Your inputs are for January 1st and the report outputs are for December 31st.

Best,
Brian

And do the investment earnings assume recommended withdrawals occur on 1/1 or 12/31?

Hi Chris,

I think you're probably well within the effective margin of error given the uncertainty of future events (e.g. annual variations in RoR, inflation, taxes, actual withdrawals, etc.). To test how much the difference is between Jan. 1 and Dec. 31 withdrawals, I created a simple model:

- $100K starting assets (year 1)
- 2.913% real rate of return (6% nominal return and 3% inflation)
- Withdraw 4% of each year's assets annually
- Compare year end asset levels for Jan. 1 and Dec. 31 withdrawals

For a single year, the delta was ~0.12%. After 10 years, Dec. withdrawals had ~$1,050 more in assets or ~1.2% higher than Jan. withdrawals. After 20 years, this was ~$1,872 or 2.3% higher. After 30 years, this was ~$2,503 or ~3.5% higher. If you started with $200K in assets (double the model), the percentages would be the same and the dollar amounts two times higher.

If you took mid-year withdrawals or spread throughout the year, the delta would be less. Perhaps half these amounts as a first approximation.

It seems likely that portfolio annual investment expenses would be larger than these amounts in most cases. If you wanted to create a special expenditure that covered both the delta above and annual investment expenses, that could be worthwhile. However, the extra profile complexity and effort probably won't be much more accurate over the long-term given the many uncertainties we face. If it bothers you, mostly for peace of mind, you could include this in your profile.

Specifically for your next year's withdrawals, if you are trying to get a "nearly" exact value, you could estimate your total withdrawals including RMDs, investment expenses, multiple withdrawals throughout the year, etc. The output of this could be your seed money and you would only have to do this one year at a time, instead of through your end of life.

Best,
Brian