The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing


Subject:  Re: Pension figured into Networth??? Date:  10/15/1999  3:26 PM
Author:  JABoa Number:  14580 of 88758

I get the same number as GrayWulff. Just to be explicit (and the assumption is different from JAFO's which has declining payments), you want to calculate the principal which, invested at 6%, will produce an income stream of $45,000 a year for 30 years. The principal declines each year because of the withdrawals, but is compensated for somewhat by the interest that the remaining principal earns. At the end of the 30 years, you have $0.00.

When you think about it for a minute or so, you see that this is exactly the same financial problem as a mortgage. Well, as regards calculation.

For those who want to see the formula as opposed to have a spreadsheet program calculate it for you, I (somewhat vainly) suggest they visit the Math board. Start at the beginning, it should be somewhere in the first 20 messages.
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us