A present value (PV) amount of $1.96 million in a pre-tax retirement account is required today to fund a future payment stream of 30 years of $100,000 annually (with a +2.5% cost of living / inflation increase for maintenance of purchasing power) assuming that a +6% rate of return (ROR) can be maintained into the future.
If the ROR falls to +5%, the PV amount rises +13% to $2.21 million. If the ROR rises to +7%, the PV falls -11% to $1.75 million.
These calculations do not account for the payment of federal income taxes which would be due as a result of withdrawals from any pre-tax retirement funds.
Source: BTN Research
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