Suppose you saved $750,000 and invested in an account that pays 5.00%. You expect inflation to average 2%, and you want to make year-end withdrawals that grow at the rate of inflation for each of the next 20 years and end up with a zero balance after the 20th year. How big will your initial withdrawal be?

Answer rating: 100% (QA)

To calculate the initial withdrawal amount we need to account for the impact of inflation and the in... View the full answer