You plan to retire in 6yrs with $584846. You plan to withdraw $105200 per year for 19 years. The expected return is X % per year and the first regular withdrawal is expected in 7yrs. What is X?

To solve this, we can treat the scenario as a **present value of an annuity** problem. Here's the approach:

1. **You have an initial amount of $584,846** today.
2. **You plan to withdraw $105,200 per year** for 19 years, but starting 7 years from now.
3. We need to calculate the interest rate $ X \% $ that allows you to make these withdrawals.

The basic idea is that the present value of the annuity (the total value of all your withdrawals discounted back to today) must equal the current balance of $584,846.

### Formula:
We can use the **present value of an annuity** formula, adjusted for the 7-year delay before withdrawals start:

\[
PV = \frac{PMT}{r} \left(1 - \frac{1}{(1+r)^{19}}\right)
\]

Where:
- $ PV $ is the present value of the annuity (your total balance),
- $ PMT $ is the annual payment ($105,200),
- $ r $ is the annual interest rate (which is $ X\% $),
- $ 19 $ is the number of withdrawals.

However, since the first withdrawal occurs 7 years later, we need to **discount** this entire annuity back by 7 years:

\[
584846 = \frac{105200}{r} \left(1 - \frac{1}{(1+r)^{19}}\right) \times \frac{1}{(1+r)^7}
\]

Now, let's solve this equation for $ r $, which represents the rate of return $ X\% $. I'll compute it step-by-step.The expected annual return rate $ X $ is approximately **8.06%**.

Would you like more details or have any questions?

Here are 5 related questions to expand on this information:

1. How would changing the number of withdrawal years (19) affect the interest rate needed?
2. What happens if the first withdrawal starts sooner, for example in 5 years instead of 7?
3. How would a different initial retirement balance impact the necessary return rate?
4. What if you want to increase the annual withdrawal amount by a certain percentage each year?
5. How does the interest rate change if you plan to leave some money at the end?

**Tip:** When planning withdrawals in retirement, consider inflation, as it can reduce the purchasing power of your withdrawals over time.

You plan to retire in 6 years with $584,846. You plan to withdraw $105,200 per year for 19 years. The expected return is X % per year and the first regular withdrawal is expected in 7 years. What is X?

Determine the expected annual return rate (X%) for a retirement plan where an initial balance of $584,846 is set to last for 19 years with annual withdrawals of $105,200 starting 7 years from now. Learn how to apply the present value of an annuity and discounting formulas to find the interest rate required.

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