I've seen this formula from MDM (who said it came from Heart of Tin):
Time in years to FI = Ln((S + i*E/WR) / (S + i*A)) / Ln(1 + I)
A = amount currently invested in funds you will draw upon in retirement
E = total expenses in retirement (including taxes, in today's dollars)
I = Real return on invested retirement funds
S = Annual amount invested in funds you will draw upon in retirement
WR = withdrawal Rate planned for retirement (e.g. 4%)
I have a few questions regarding the definitions:
is E per year? Or total for all years I plan to be retired?
For S, is it the amount that I will invest each year until retirement?
Does it assume that you want the principal to remain untouched?
I've also been using forum search and google site: search to try to find the post from someone whose money only needs to last x years until their pension / defined benefit plan kicks in. Anyone remember that?
Thanks,
TexasAnnie