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.
Mon, 08/07/2017 - 14:10
Yes, all of your assumptions
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.
Mon, 08/07/2017 - 14:27
Right; I should have
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.