How does PRC calculate the overall withdrawal rate? The rate appears in the Tabular Projections>Summary table, the column is empty for 8 years, and has a percentage in all other years included in the table. What would an empty cell mean?
Peter
@docfiddle You have enough income from other sources (work, pension, SS, etc) such that you don't have to withdraw funds from your accounts to sustain your spending in those years.
@hines202 OK, so withdrawals from IRAs (RMDs, for example) are not included in that calculation? Because those are occurring in the years for which the overall withdrawal rate cell is empty.
RMDs are just a forced movement of money from one of your accounts to another, so are not themselves a withdrawal. They are obviously a taxable event, so the taxes are an expense that adds to the withdrawals for the year. Other withdrawals would be ordinary spending, gifts, one time expenditures like buying a vacation home, etc. Your withdrawal rate may be zero if your investment returns plus pensions, SS, rents received, wages, etc. exceed all the withdrawals. That's a happy place to be!
@docfiddle Withdrawal rate = Cash flow / total savings in PRC, where cash flow = total income / total expenses. RMD's definitely do not figure in.
Stuart
Thanks everyone. I knew that distributions were not considered income by PRC (exc as a taxable basis for AGI), but I've still considered them a withdrawal. PRC assumes that the funds flow to post-tax investment accounts and/or the cash account, which in my book makes them a withdrawal that creates realized income. But I get the distinctions PRC needs in order to run its analysis.
