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There's a Bloomberg Wealth Manager article in the 10/2000 issue by Lynn Brenner that suggests the Federal MIDTERM rate is the benchmark, while a 10/9/2000 Business Week article by Anne Tergesen cites the federal LONG TERM rate [but goes on to use the MIDTERM rate in its example]. Any idea how I might tell which is the correct rate to use?

Also, with regard to the annuity method of 72t calcualations, can anyone share the formula for determining the factors that might be used to work backwards from a desired dollar amount of income? I have a commercially supplied brochure that gives me the factors, but only on 1/2% interest rate steps...

Thanks for any info or comments!

Fowlmike
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fowlmike asks,

There's a Bloomberg Wealth Manager article in the 10/2000 issue by Lynn Brenner that suggests the Federal MIDTERM rate is the benchmark, while a 10/9/2000 Business Week article by Anne Tergesen cites the federal LONG TERM rate [but goes on to use the MIDTERM rate in its example]. Any idea how I might tell which is the correct rate to use?

Also, with regard to the annuity method of 72t calcualations, can anyone share the formula for determining the factors that might be used to work backwards from a desired dollar amount of income? I have a commercially supplied brochure that gives me the factors, but only on 1/2% interest rate steps...

Thanks for any info or comments!


Use of either the mid-term or long-term applicable Federal rates are permissible according to several IRS private letter rulings.

There's a free downloadable Excel spreadsheet on the Retire Early Home Page that allows you to enter any interest rate you want to determine the annual distribution using the annuity method, see link:

http://www.geocities.com/WallStreet/8257/wdraw59.html

intercst
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