Will The River Run Dry?

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IMG_3788There are many ways to gauge financial well-being, but there’s one measure that is universally relevant, regardless of age or income: will my money last longer than I do? Or stated in more drastic fashion: will I run out of money?

Will the River Run Dry?

The Osbon Labs retirement calculator is a great tool to answer that question. We like it because it doesn’t rely on you being a forecaster of inflation or markets. You simply enter what you know about yourself and your plans. It provides a simple ballpark of your account’s life expectancy.

Let’s look at the pre-loaded example, based on the situation of one of our actual clients. This investor is 51 and plans to retire at 65. She has one million dollars saved, and can add $20,000 to that sum each year. At retirement she plans to draw $200,000 from her account each year.

The bottom portion of the calculator shows when she will run out of money at various levels of expected return. With a 7 percent return after inflation, she never runs out, and as the graph shows, her balance grows, not falls, over time.

On the other hand, with a 0 percent return (holding money in Mason jars), the river runs dry only 7 years after retiring. With a 5 percent return, she runs out of money at the age of 85. Rate of return really matters!

We encourage you to play with the numbers in this calculator to reflect your own situation. (All of the blue shaded fields are enterable.) You don’t have decisive control over how long you live, but you can definitely control when you retire, how much you contribute, and how much you spend. We can help you influence your annual rate of return through asset allocation, cost control and tax efficiency.

Max Osbon – mosbon@osboncapital.com


This article may include forward-looking statements. All statements other than statements of historical fact are forward-looking statements (including words such as “believe,” “estimate,” “anticipate,” “may,” “will,” “should,” and “expect”). Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Various factors could cause actual results or performance to differ materially from those discussed in such forward-looking statements.

Nothing in this article is intended to be or should be construed as individualized investment advice. All content is of a general nature. Individual investors should consult their investment adviser, accountant, and/or attorney for specifically tailored advice.

Any references to third-party data or opinions are listed for informational purposes only and have not been verified for accuracy by the Adviser. Adviser does not endorse the statements, services or performance of any third-party vendor without specifically assessing the suitability of a third-party to a client’s or a prospective client’s needs and objectives.

Past performance is not indicative of future results.  Investment in securities, including mutual funds and ETFs, may result in loss of income and/or principal.

An investment cannot be made directly in an index.

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