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"Also, I disagree with the notion that the value of your IRA is really significant. When I retired in 2013 at age 68, I had contributed to tax-deferred 401(k)/IRA accounts for 31 years."

Oh, but it really is.

If your IRA balance is 20% of your nest egg.......let's throw out some big round numbers.....

Your IRA balance is 1 million. Your taxable investments are 3 million.

You are 70 years old. The government thinks you'll live less than 20 more years. Maybe you think you'll make 100.

So you use a 30 year SWR. You now have 4 million in assets. You could take $200,000 a year out happily for life. Inflation adjusted. If you use a 20 year SWR, probably $250,000 a year - pretax of course.

The government makes you take about 3.3% or so out of your IRA at 70. Or $33,000 roughly.

That is not even 1/4 of what you probably should be thinking of spending - after taxes of course.

When I retired in 1999, I had only had 10 years or so to contribute to an 401K that I converted to IRA.


If you do the full 4% withdrawal of nest egg to live on, after taxes, you'll still have well over $100,000 in most states in the country after taxes.

Of course it makes a difference of the ratio of tax deferred to non-tax deferred assets!

If you are IRA heavy, even 100%, well, even then, if you believe in the SWR philosophy, for the first ten years, you probably should be spending ALL your RMD. It's under 4% inflation adjusted on your starting balance!

Not that you have to - unless you want to keep piling up assets for Uncle Sam to tax away at your death.

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