The ICA Guide
The ICA Guide
The ICA Guide
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Investing for retirement<br />
Meet Bob and Cathy Quan, just retired. <strong>The</strong>y began preparing for<br />
retirement 15 years ago with their first investment of $1,000 a<br />
month in <strong>ICA</strong>. <strong>The</strong>ir financial adviser set up an Automatic<br />
Investment Plan to move money directly from their checking<br />
account into the fund.<br />
Looking ahead to 20 years in retirement, and aiming to preserve<br />
their principal, the Quans plan to make monthly withdrawals at<br />
an annual rate of 5% of their account value at each year-end,<br />
reinvesting their dividends and capital gain distributions.<br />
It’s impossible to predict how much money the Quans will<br />
withdraw over the next 20 years, of course. But this chart shows<br />
how their plan would have worked if they had invested $1,000 a<br />
month from 1977 through 1991 and then withdrew 5% a year<br />
over a 20-year period ended December 31, 2011. <strong>The</strong>y would<br />
have taken a total of $1,251,719 in withdrawals — and would<br />
still have $1,244,801 left.<br />
A program of regular investing neither ensures a profit nor<br />
protects against loss, and investors should consider their<br />
willingness to keep investing when share prices are declining.<br />
For illustrations of higher or lower withdrawal rates, please ask your<br />
financial adviser.<br />
* Cumulative volume discount applied when appropriate.<br />
20 <strong>The</strong> <strong>ICA</strong> <strong>Guide</strong><br />
Year<br />
Cumulative<br />
investment*<br />
Value of<br />
account Withdrawals<br />
1977 $ 12,000 $ 11,562 —<br />
1978 24,000 25,195 —<br />
1979 36,000 42,440 —<br />
1980 48,000 64,360 —<br />
1981 60,000 76,289 —<br />
1982 72,000 116,334 —<br />
1983 84,000 151,995 —<br />
1984 96,000 174,685 —<br />
1985 108,000 246,465 —<br />
1986 120,000 312,256 —<br />
1987 132,000 339,917 —<br />
1988 144,000 397,509 —<br />
1989 156,000 527,242 —<br />
1990 168,000 542,953 —<br />
1991 180,000 699,995 —<br />
1992 711,924 $35,000<br />
1993 756,747 35,596<br />
1994 720,034 37,837<br />
1995 899,077 36,002<br />
1996 1,023,230 44,954<br />
1997 1,270,097 51,161<br />
1998 1,489,260 63,505<br />
1999 1,654,156 74,463<br />
2000 1,633,212 82,708<br />
2001 1,477,696 81,661<br />
2002 1,195,646 73,885<br />
2003 1,439,185 59,782<br />
2004 1,502,479 71,959<br />
2005 1,526,454 75,124<br />
2006 1,686,789 76,323<br />
2007 1,702,227 84,339<br />
2008 1,045,893 85,111<br />
2009 1,266,612 52,295<br />
2010 1,333,659 63,331<br />
2011 1,244,801 66,683<br />
Total withdrawals: $1,251,719
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