Have you ever been concerned that you don’t have enough assets to last? Here's a simple guide that will give you some insight. The table shows how much you need to take an inflation-adjusted monthly income:
Amount of Capital Required to
Provide a Monthly Inflation Adjusted Income
|
|
|
Monthly Income |
|
|
Age |
Male Life Expectancy |
$2,000 |
$3,000 |
$4,000 |
$5,000 |
|
|
|
|
|
|
Age 55 |
22.2 |
$357,959 |
$536,939 |
$715,918 |
$894,898 |
Age 60 |
18.4 |
$316,161 |
$474,242 |
$632,322 |
$790,403 |
Age 65 |
14.9 |
$271,877 |
$407,815 |
$543,753 |
$679,691 |
Age 70 |
11.9 |
$228,882 |
$343,323 |
$457,764 |
$572,204 |
Age 75 |
9.2 |
$185,716 |
$278,574 |
$371,432 |
$464,290 |
The figures required are based on male life expectancies. Single women require about 20% greater balances because of their longer life expectancy. The figures indicated assume that the capital is spent completely over the life expectancy. Assumed rate of return is 8% and inflation is 4%. Example: a man age 65 desiring $3000 a month from his investments needs a portfolio of $407,815. The 8% return and 4% inflation figures are hypothetical and do not reflect an investment in any particular security. The market for all securities is subject to fluctuation.
Use the above table as a guide to gauge your expenditures in relation to the size of your portfolio. If you find that your capital is insufficient to meet income needs or that you need to earn a higher rate of return, please check off on the attached coupon to schedule a portfolio redesign meeting.