Maybe not. The problem with the data you're referring to is that they are for the general populace and not a specific person. Factors such as health, ethnicity, wealth, family history, certain behaviors, etc. all have a significant relationship with longevity. For instance, depending on which longevity calculator I use, my (median) life expectancy is predicted to be anywhere from 92 to 101. If we amalgamate those, I probably have at least a 1/3 chance of surviving to 100. As such, VPW doesn't appeal to me personally because I'm not a huge fan of SPIAs.azanon wrote: ↑Mon Nov 05, 2018 8:55 amI'd find another actuarial website. 50% chance either you or your wife hit 100?!? That's extremely optimistic. Though I realize longevity is improving, today only 0.0173% of Americans live to 100. And don't confuse that with 1%. That's 0.0173% chance (source: http://www.genealogyintime.com/Genealog ... page1.html ). Now granted, I realize there's a slight increase starting at age 55 instead of 0, but it's not going to bump up that high!jmk wrote: ↑Mon Nov 05, 2018 12:00 amLooking at longevityillustrator for instance, I see that there is a 50% chance at 55 that either my wife and I will live to 100. So if I were to retire today this would be a reasonable number to use in the vpw equations for my first years of withdrawals. (100-55=45).
If you want to round off to a whole number, for all intents and purposes, people don't live to 100.
For those wanting a more 'hands on' approach, a simple time value of money calculator can be used instead. You simply input the dollar amount of your portfolio that you wish to amortize (it could be all of your portfolio or some portion of it) over your remaining lifetime, the assumed real rate of return, and the period of time you want to amortize payments over. For instance, someone with $1 million to amortize over 30 years at a 3% real rate of return would withdraw $51k in the current year. This would be recalculated each subsequent year as the remaining amount of capital, the assumed rate of return, and the remaining years of withdrawals change. It only takes a few minutes at most once per year to do this.