Term Certain Method

You have a nest egg built up for retirement. You've got $1 million split among your many investments. But how much should you let yourself spend each year? You could blow it all in the next 12 months, have a wild time, and then survive on Jello and handouts until you finally keel over.

Probably not the ideal tactic. How about trying the term certain method? It involves using your life expectancy to estimate how much you can spend per year until the time you finally kick the bucket.

You're 65 years old now. Actuarial tables suggest your life expectancy sits at 19.4 more years. Lets give you the benefit of the doubt and call that 20. Divide that million bucks by 20. You can spend $50,000 a year by the term certain method. (The actual math would be a little more complicated; the money in your accounts are still earning interest, etc.)