I decided to finally take the time to plug my information into the AARP Retirement Calculator this evening. Went through and used actual figures, it spit out the results and I modified the results to my liking. Showed that we have enough to live on throughout our estimated lifetimes.
Now I know this is not substitute for real financial planning, with specific taxes and the increases in healthcare that far exceed the estimated inflation rate, and other factors, but ....
The results showed that throughout retirement, our withdrawl froim our IRAs will continuously decrease, being offset by increasesd amounts of Social Security. This is completely FALSE.
There's a little wiggle under the federal tax laws that requires everyone to begin manditory (R)equired (M)inimum (D)istributions, starting at age 70-1/2. The rub comes in that this amount will increase each year; whether we need the money or not. The prinicpal will continually decrease each year.
Therefore, instead of decreasing the amount withdrawn from the IRAs throughout retirement, this amount will automaticall increase. (And subsequently so will taxes, the larger the Distribution, the more taxes are due, even so much as throwing one in a larger tax bracket after so many years).
The effect of RMDs increasing each year will dramatically change the outcome of the calculation and should be incorporated into the AARP calculator, as it represents one of the most important aspects of the final calculation.
Yes, the proportion of your remaining IRA balance will increase each year. But the actual account balance must be considered as well. Typically, I would expect the account balance to increase slightly each year with capital growth, even with RMDs taken. But eventually the curve changes direction and the withdrawals will be greater than earnings, then the curve (describing the account balance) will trend downward.