Project assets transparently
Show current savings, contributions, years, return, and fees separately. A plausible-looking balance can still rest on an unrealistic return or contribution assumption.
Convert assets into spending carefully
A withdrawal percentage is a planning scenario, not a guarantee. Retirement length, market sequence, fees, taxes, and changing expenses affect sustainability.
Add income without double counting
Pensions, annuities, and Social Security can supplement portfolio withdrawals. Verify whether a retirement account balance already includes assets intended to fund another quoted income stream.
Example: layered monthly income
A $600,000 portfolio modeled at a 4% first-year withdrawal supplies $24,000 annually, or $2,000 monthly before tax. Adding $1,800 of monthly dependable income gives $3,800 before taxes and expenses, subject to all assumptions.
What to check before you decide
- Long-term return and inflation assumptions are uncertain.
- Taxes, required distributions, healthcare, and pension terms need individualized review.
Sources behind this guide
These official and primary sources let you verify rules, definitions, and terms that may change.
U.S. Department of Labor — Retirement planning↗