[Mormon Red Death]

Originally Posted by pelagius

Mormon Red Death, it seems like you are assuming that the portion that you don't take out (every month) isn't growing at some rate in terms of your calculations:

2,100,000/(360) = $5,833 or 73% of 8000 dollars.

A simple way to think about it is if you when you retire you buy a 30 year annuity worth 2.1 million dollars. Suppose, the annuity pays 5% annually (but monthly payments). Then your monthly income from the annuity is, $11,273 per month. Of course, that is in nominal dollars and not real. Let's suppose you can get an annuity that pays a constant 2% annually in real dollars (kind of like an i-bond). Then the monthly income in real terms (relative to price levels the day you retire) is $7,762. Thus, 2.1 million should give you significantly more per month than 75% of $8,000.

I figured 6% return on my money until its out... Inflation was assumed to be 2.3% Hence 8000 today is worth ~14,500 in 2039