Traditionally, tables have been prepared showing how long IRA funds will last based on rates of return and annual withdrawal rates. These tables, however, assume constant returns over the projection period. Many financial planners are now using a technique that allows for fluctuations in market returns. A computer is programmed to estimate how long funds will last under many different return scenarios and to determine the probability that funds will last until a specified age. This technique is called

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Based on the description provided, the technique being used by financial planners is computer simulation, in which a computer program estimates different return scenarios and their probability of sustaining funds until a specified age. This differs from traditional tables that assume constant returns, and is not a decision-tree analysis or sensitivity analysis. Cost-benefit analysis is also not relevant to this technique.

Traditionally, Tables Have Been Prepared Showing How Long IRA Funds