Investment Distributions

This calculator helps you determine either how large or how long periodic distributions can be taken out of an investment before it runs out. If you enter the number of years you need the distributions to last, this calculator determines the amount you can take out each period. If you enter a periodic distribution, it will calculate how long before your balance runs out.

While this calculator can provide you with some insight, it was developed to be very general and may not fit everyone’s personal situation. Please feel free to contact our office after using this calculator so that we can perform a more thorough analysis.

Starting balance

Total amount that you currently have invested. Include any sources of investment savings such as 401(k)s, IRAs and Annuities that you wish to include in this analysis.

Annual return

This is the annual rate of return you expect from your investments after taxes. The actual rate of return is largely dependent on the type of investments you select. The S&P 500 for the ten years ending on December 31st, 2011 had an annual compounded rate of return of 2.92%, including reinvestment of dividends. From January 1970 through the end of 2011, the average annual compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 10.01% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a bank may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.

It is important to remember that these scenarios are hypothetical and that future rates of return can’t be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that funds and/or investment companies may charge.

When you are taking periodic distributions from an account or investment, the return earned is often lower due to more conservative investment choices to help insure a steady flow of income.

Expected annual inflation rate

What you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI). From 1925 through 2011 the CPI has a long-term average of 3.0% annually. Over the last 31 years highest CPI recorded was 13.5% in 1980.

Distribution amount

This is the amount that you expect to be withdrawing from your investments. All distributions are assumed to be taken at the beginning of each period. If you choose the calculation option “Maximum periodic distribution” this field will be calculated.

Distributions to last

This is the number of years that your distributions are to last. If you choose the calculation option “Years balance will last” this field will be calculated.

Inflation adjustments

These selections allow you to adjust your distributions for inflation. If you choose “No adjustment for inflation” your distribution will remain at a constant amount for the entire duration of your distributions. “Increase distributions annually” will increase your distribution amount at the end of each year by the rate of inflation. This begins at end of the first year of distributions. Choosing this option helps illustrate the cost of providing a current amount of purchasing power throughout your distributions.

Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

Calculators are provided by an independent third party and are being made available to you as self-help tools for your independent use and are not intended to provide investment advice or be representative of actual results. We do not guarantee their applicability or accuracy in regards to your individual circumstances. The determinations made by these calculators should not be construed as guarantees or projections. Moreover, the reasonableness of certain information may change over time because of changes in tax law, investment trends and your personal circumstances. The information contained here is based on current law and has been obtained from sources believed to be reliable, but we do not guarantee its accuracy. Investment results can vary considerably depending on the type of securities involved, general market conditions and other factors. It is important that you periodically review and update your plans. Raymond James does not provide tax or legal advice. You should contact your tax or legal advisor concerning your particular situation. All investments carry a degree of risk, and past performance is not a guarantee of future results.

Investment Distributions

Financial Calculators