This document summarizes the long term portfolio and retirement plans for a married couple retiring in 2014. It outlines the key details of their retirement accounts and investments totaling $860,800. It calculates a sustainable withdrawal rate of 4.64% based on their projected life expectancies and goals to maintain a 10% probability of portfolio depletion. It also models lower withdrawal rates and the impact on portfolio longevity under different market decline scenarios. The plan is to take $3,867 in monthly distributions from the portfolio to cover living expenses, with taxes already accounted for in the annual distribution target amount.

1. Long Term Portfolio (LTP) 2014 Sample Retirees - Her and Him
All Closing Values for markets prior Oldest Birth Year 1954 Note: Expected Longevity = 50%
to date: 6/9/2014 Youngest Birth Year 1954 Female Male
$X=portfolio value; WR%=withdraw rate; $Y=ann living exp (w/ taxes) Longevity Percentile 50% Joint 89 89
His IRA 165,000 $X * WR% = $Y Initial Target POF 10% Individual 86 82
Her IRA 175,000 WR% = $Y / $X Portfolio % Decline Possibility of Adjustment (PoA) @ WR%:
His Roth 175,000 LTP Equity ~ 25% $X = $Y / WR% Required: WR%: * PoA Sustainable @ Lowest
Her Roth 170,000 Current LTP Value= $860,800 4.64% 10.00% POF @ Port. Value
Living Trust #1 175,800 $819,478 4.8% 4.84% 15.00% 3,707$ Sustainable
$786,948 8.6% 5.01% 20.00% 3,581$ Dist. $$ per
$760,025 11.7% 5.16% 25.00% 3,477$ month.
* WR% is a distribution rate; NOT a rate of return
Note that the PoA # drives a decision
more than portfolio values.
Action taken BEFORE reaching PoA values ...
(1) Portfolio Allocation "Reality Check"
& Discussion (2) Turn off Transfer between Portfolios
(3) Retrench spending
Limitations
Qtrly Dist from: 165,000 All Account 1,000,000 The balance of your portfolio represents the
Acct Empties*: December-17 Empty*: September-35 Notes: Possibility of Excess (=100% minus PoA above).
*Assumes ZERO return (simulates just cash)
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Distribution Reservoir Portfolio (refilled 1/4/7/10)
Port Target: Diff (+ Good)
Living Trust #2 139,200 $139,200.00 $0
Ultra Defensive $1,000,000 <Combined Overall Total Value ($X)
Living Expenses
Reserve Mos. 36 $Y
Monthly Distr. 3,867 $46,400.00 <Ann Distrib. Target ($Y)
Federal and State Income taxes are INCLUSIVE in the annual distribution target.
May-17 36.00 <# Months in Reservoir Additional taxes in the amount of: $0 in distributions are included here.
Month/Year 0.00 <# Months over/(short)
Life Expectancy Tables Entered at
Retirement Age
Note: income distribution are gross before taxes and before adviser
fees (both paid from gross distributions). Life expectancy from Social
Security tables. 25% Equity characteristics real return: 4.39%; Standard
deviation: 6.45%.