How long will our money last

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My husband and I are each 62 and hope to retire in 3 years. After retirement we will receive $5,000 per month after taxes from our employers' pension plans and $1,000 per month after taxes from Social Security. Unfortunately our monthly living expenses are $15,000. Our social obligations preclude further economies. We have $1,200,000 invested in a high-grade, municipal-bond mutual fund. However, the fund's annual after-tax return has dropped to 3.5%. We plan to make annual withdrawals from the mutual fund to cover the difference between our pension and Social Security income and our living expenses. How long will our money last?

You can assume that the withdrawals (one per year) will sit in a checking account (no interest) until spent. The couple will use the account to cover the monthly shortfalls.

How many years before the couple runs out of money? (Do not round intermediate calculations. Round your answer to 2 decimal places)

Reference no: EM133123811

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