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required minimum distributions

Submitted by jimny11 on 19 January 2011 - 2:55pm

I have been using ESP to study some retirement scenarios having just the required minimum distribution from my retirement accounts. To do this, I set the “% … of assets to be spent” input on the smooth withdrawals tab to 0 or some low value. This seems to work well except for the Monte Carlo, which gives rather anomalous results. Is there a better way to accomplish this that would give Monte Carlo performance more in line with that obtained using uniform withdrawals from the retirement accounts? Also, some of the funds in my accounts do not have to be considered when calculating the required minimum distribution until age 75. Is there any way to get ESP to include this?

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Submitted by Dick Munroe on 21 January 2011 - 9:45am.
1

No, you're doing the right things. You could simply set the starting age of withdrawal to whatever age you want rather than specifying a low percentage and the RMDs should be fine.

I don't recollect any weirdness with the RMD and MC, but if you think there is, open a support ticket, upload your database and provide a full explanation of the problem and how to reproduce it. "Anomalous results" doesn't help much in analysis.

No, as far as we're concerned any IRA is subject to MDR starting at age 70.5. You can fake it using special receipts. You might be able to fake it as well pretending it's a pension.

Best,

Dick Munroe

Submitted by jimny11 on 21 January 2011 - 8:16pm.
2

Thanks. Setting the initial age for smooth withdrawals to 99 and leaving the % to spend at 100 works much better. The MC results seem quite reasonable now.
Jim

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