Retirement Income from a 401K Account – Part 1


I recently retired, so deciding what my income is, deciding how quickly to drain my retirement account, has gained a new urgency. Unless the goal is to live off Medicaid, or its expected that the government will put us down once we reach our life expectancy, its important to have a plan. And since the future is even harder to predict than the past, its a plan that must be flexible, and can adjust with the economy. Its important to remember that accommodations made early in retirement will be smaller than the forced reductions made later.

I’m hoping to do this in three parts. First, look at some trial & error estimates based on subtracting annual amounts. Second, look at mortality tables and life expectancy. And third, try to come up with some algebraic expressions, or simple formulas to make periodic reassessment easier. Yes, this has been done by more knowledgeable people than me, but for my sanity, I want to know what goes into these estimates and understand why I should make sacrifices now.

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