Retirement accounts, Assumptions interaction

I need to check my understanding of some of the program inputs and their interactions. I've made some assertions (below) for which I would certainly appreciate any comments or corrections.

Using Economics-based planning:

The "Assumptions/Nominal Rates of Return" Person #1, Person #2 retirement account inputs apply to *all* of 401(k), 403(b), IRA, etc.

Under "Retirement Accounts/Smooth Withdrawals" I read input #1. as the percent of the total of those combined (401(k), 403(b), IRA) retirement accounts to be annuitized and #2 as the percent of the remainder to be spent; e.g., #1: 80% to be annuitized and #2: spending 100% of the amount not annuitized.

Under "Retirement Accounts/Choice of Annuity" I understand #3, "Annuity to grow by" input as a graded or growing payment from the annuity as differentiated from below that where Person #1 and Person #2 have input boxes for, "Fixed and earns a nominal rate of return" which is the actual rate of return of the underlying investment in the annuity.

Thanks in advance.


dan royer's picture

Yes, all of your assumptions are correct! Well, in the first one you mention, that is all of the accounts associated with Person 1 together receive the assumed nominal rate of return you indicate for Person 1. Then the same for Person 2, which can be a different rate of return.

Right; I should have clarified assertion #1 to distinguish the individual rates of return which is how I do understand it. Thanks for nailing these down for me.

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