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If you mean you want to spend your last dollar in 30 years, that is easy - but I suspect you are saying something else. The length of time money will last depends very much on how much you take out of the pot every year.

There is a very good analysis of this problem at the Retire Early web sight. http://www.geocities.com/WallStreet/8257/reindex.html

Without trying to steal their message if you take 4% of the money out the first year, and increase the yearly withdraw by the inflation factor used for Social Security payments, you won't run out. If you start with 5%, chance a good you will run out before 30 years.

Obviously how much money is left in X years depends on the stock market and neither of us knows what 2003 or 2004 will be like - forget 2020. So any good financial adviser does one of two things. It is very conservative and few people complain about having more money then projected. Second, the assumption is made the future will average like the past - some years will be better, some (like 2002) will be worse then the average.

The advise I have seen suggests instead of x% on stocks y% in that and z% in that - realize 30 years in a very long time. If inflation is at say 3.5% a year for 30 years, a $1.00 McDonald's Big Fries will cost $2.80. If you want 4.5% inflation the Fries will cost $3.74! So at least until you have a life expectancy of say 10 years, the majority needs to be in something that tracks or maybe beats inflation and that means stocks. Maybe you want to buy the S&P500 or the Dow-Jones Average instead of mutual funds or individual stocks. But for those of us who do not currently have enough money to ignore $3.00 French Fries in the future, we must be in stocks someway.

Gordon
Atlanta
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