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How then can Rayvt's calculations [excerpted from his post] be accurate?

~ Starting 1/1/1965, accumulate until 1/1/2013
~ Initial $10,000 and add $1000/mo
~ S&P final balance: $12,003,000
~ S&P B&H start $5000/mo withdrawal on 1/1/1970 [just five years later] with a starting balance of $12,003,000.
~ Final value 20 years later, 1/1/1990: $95,615,000

Do we even need a spreadsheet to ask, "What's wrong with this picture?"

That's where back-of-envelope sanity checks become useful.

Not sure what exactly you are questioning.
The difference between MSN's $1M and my figure? When you do compounding, the numbers explode rapidly as the rate goes up.
The " 1970 [just five years later]" balance of $12M?

This was a darn hard thing to try to model reasonably. The explanation is also maybe difficult to get across clearly.

It's really two different modelling runs.
Run 1) 48 year Accumulation phase from 1/65 to 1/13, starting value $10K and adding $1K/mo. The final value of that: $12,003,000

Run 2) 20 year Deccumulation phase, starting value $12,003,000 (the final value of the accum phase), withdrawing $5000/mo.

Now, what time period do we use for the deccum phase? Can't use 2013-2033 because that's the unknown future.
So pick *any* 20 year time span that we have actual historical data for. I picked 1970 at random, and because that excluded the dot-com boom which would arguably give over-optimistic results.
You could reasonably use any 20 year period you want, anywhere from 1950-1970 to 1993-2013.

Just change the dates in the spreadsheet. It's a bit of a pain, because I have to reset several parameters and then pick out the ending line from the middle of the spreadsheet, 20 years later.

But here goes: for 1960-1980 period:
S&P: $40,698,219

IUL: $4,922,518 - -$2,310,204 (loan) = $2,612,313

They are both lower than 1970-90.

Here, for 1980-2000 period:
S&P: $297,359,265

IUL: $7,867,082 -$2,310,204 (loan) = $5,556,877

They are both higher than 1970-90.

S&P went from 107.94 to 1469.25 (no dividends). That's 13.6 times.
$12M * 13.6 = $163M, so with dividends $297M sounds reasonable.
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