You are 60 years old. Currently, you have $10,000 invested in an IRA and have just received

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You are 60 years old. Currently, you have $10,000 invested in an IRA and have just received a lump-sum distribution of $50,000 from a pension plan, which you roll over into an IRA. You continue to make $2,000 annual payments to the regular IRA and expect to earn 9 percent on these funds until you start withdrawing the money at age 70 (i.e., after ten years). The IRA rollover will earn 9 percent for the same duration.

a) How much will you have when you start to make withdrawals at age 70?

b) If your funds continue to earn 9 percent annually and you withdraw $17,000 annually, how long will it take to exhaust your funds?

c) If your funds continue to earn 9 percent annually and your life expectancy is 18 years, what is the maximum you may withdraw each year?


Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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