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```My apologies - Here's the one with line breaks.

Calculation of Cashout starting at 5% with a 4% CoLA -
(CoLA - Cost of Living Adjustment)

The long term historic rate of return for equities has
been about 11%. The cashout rate of 5% has been bandied
about as a rule of thumb for retirement income.

The calculation below assumes that invesment value does not
change.  In other words, the withdrawal made each year is
covered by the investment's return - An unrealistic expectation.

Holding this to be true, the withdrawal rate of 5% in
1999 will increase to 10.96% in the year 2019.

1999	5.00%
2000	5.20%
2001	5.41%
2002	5.62%
2003	5.85%
2004	6.08%
2005	6.33%
2006	6.58%
2007	6.84%
2008	7.12%
2009	7.40%
2010	7.70%
2011	8.01%
2012	8.33%
2013	8.66%
2014	9.00%
2015	9.36%
2016	9.74%
2017	10.13%
2018	10.53%
2019	10.96%

If the withdrawal rates match the investment returns, the investment
will not change.  If the return on investment is assumed to
stop at 11%, then the withdrawal amount can not increase with an
inflation rate of 3% after 20 years. To do so will decrease the value
of the investment.

The numbers below use an 8% withdrawal rate and a 3% inflation rate.

1999	8.00%
2000	8.24%
2001	8.49%
2002	8.74%
2003	9.00%
2004	9.27%
2005	9.55%
2006	9.84%
2007	10.13%
2008	10.44%
2009	10.75%
2010	11.07%

In this case, the withdrawal rate reaches 11% in just over 10 years.

If this calculation is expanded such that the rate of return is the expected 11%
historical value, then in the early years the investment will grow so
that it will take much longer for the withdrawal amount to match
the 11% return because the investment value has grown.

I used \$100,000 as a starting point but the number of years will
be the same no matter what the starting amount is. These calculations
are based on an 8% withdrawal rate, an 11% return on investment, and
3% inflation.

Withdrawals	Investment	Return
Star	 \$8,000 	 \$100,000 	 \$11,000
1999	 \$8,240 	 \$102,760 	 \$11,304
2000	 \$8,487 	 \$105,576 	 \$11,613
2001	 \$8,742 	 \$108,448 	 \$11,929
2002	 \$9,004 	 \$111,373 	 \$12,251
2003	 \$9,274 	 \$114,350 	 \$12,579
2004	 \$9,552 	 \$117,376 	 \$12,911
2005	 \$9,839 	 \$120,449 	 \$13,249
2006	 \$10,134 	 \$123,564 	 \$13,592
2007	 \$10,438 	 \$126,718 	 \$13,939
2008	 \$10,751 	 \$129,905 	 \$14,290
2009	 \$11,074 	 \$133,121 	 \$14,643
2010	 \$11,406 	 \$136,358 	 \$14,999
2011	 \$11,748 	 \$139,609 	 \$15,357
2012	 \$12,101 	 \$142,865 	 \$15,715
2013	 \$12,464 	 \$146,117 	 \$16,073
2014	 \$12,838 	 \$149,352 	 \$16,429
2015	 \$13,223 	 \$152,558 	 \$16,781
2016	 \$13,619 	 \$155,720 	 \$17,129
2017	 \$14,028 	 \$158,821 	 \$17,470
2018	 \$14,449 	 \$161,843 	 \$17,803
2019	 \$14,882 	 \$164,763 	 \$18,124
2020	 \$15,329 	 \$167,558 	 \$18,431
2021	 \$15,789 	 \$170,201 	 \$18,722
2022	 \$16,262 	 \$172,660 	 \$18,993
2023	 \$16,750 	 \$174,903 	 \$19,239
2024	 \$17,253 	 \$176,889 	 \$19,458
2025	 \$17,770 	 \$178,577 	 \$19,643
2026	 \$18,303 	 \$179,917 	 \$19,791
2027	 \$18,853 	 \$180,855 	 \$19,894
2028	 \$19,418 	 \$181,331 	 \$19,946
2029	 \$20,001 	 \$181,277 	 \$19,940

Note that it takes almost 30 years for the withdrawal amount
(\$20,001) to exceed the amount of investment return (\$19,940).
The value of the investment increases from \$100,000 to a peak
of \$181,331 in 2028.  The value of the investment, if the
withdrawal amount continues to increase at the rate of inflation
begins to decrease in 2029.

In fact, if the withdrawal amount continues to grow at 3%, the
investment will drop to \$100,000 in 2041 and go negative in
2046.

Thus for those expecting to retire at 65, they can, if they feel
comfortable that their portfolio will sustain an 11% long term
rate of return,withdraw 8% annually with a 3% CoLA until the
age of 95 with their portfolio value continuing to grow.  if
they continue to survive to 107, their investment will then
be worth what it was when they began at 65.

The 5% rule of thumb for cashout in retirement is a conservative
value that should work in almost all instances.  Understanding what
the cashout number means helps to understand when even 5% may not
work.
```

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