re: what to do with a little retirement acct

quote:

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If he invests no more money, at a conservative 5% rate, that money grows to roughly $92,000 over 25 years. At a withdrawal rate of 5%, he gets $4600 per year. Far less than he would get keeping it there.

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Not really a fair comparison though.

Why would you assume that he would only withdraw the growth?

I know that's the conventional rate, but the state plan sure as hell is dipping into that principal and gambling that he won't live to withdraw for much more than 20 years, letting them keep what's left.

Also, in your hypothetical one would still have 92000 in an account that could be passed on, whereas in the state account you'll have nothing.

These are very important additional points to consider...