http://spreadsheets.google.com/pub?key=rf4WOBG64CWR5_4Ojmlye1g&output=html

To help you and others get the same result as Pinyo I’ve put in a column headed “Factor” with a single value that you can simply key to your desk calculator then multiply by the amount you want per year and its all done !

For instance, if you are aged 30 and you want to retire at 65 then there’s 35 years until retirement.

Look along the row with 35 in column A, and the factor value is 98.65.

If you want $40,000 per annum when you retire then multiply the amount you want by the factor and there you are !

98.65 * 40 000 = 3 946 000.

If you want $70,000 then do:

98.65 * 70 000 = 6 905 500

which seems about right as its just under double the value we saw at 40,000.

So that factor figure should make doing the sums quicker and easier.

Earlier I had some problems as I couldn’t believe you just multiplied the Inflation Adjusted figure by 25 come what may.

Then I realised it was simply implementing the “4% rule”. You’re only advised to withdraw 4% of your final nest-egg in the first year of retirement. So if you want to keep to that rule, then obviously your nest-egg has to be 25 times bigger than the first amount you withdraw in the first year. Then it made sense.

Presumably, though, if your nest-egg doesn’t grow somehow (e.g. thru bonds or whatever) then it will be gone in 25 years if you withdraw 4% a year, so you won’t look forward to your 90th birthday !

And if anyone is just one year from retiring, look at the low figure you’ll need for your nest-egg at the bottom of the spreadsheet.

KC