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Nest eggs require a bunch of juggling

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You've devoted much of your life to building a retirement nest egg. Now you have to make that money last.

The trick is to figure out how much you can afford to withdraw to support your standard of living without prematurely exhausting your funds."It's like fitting together pieces of a jigsaw puzzle," said Carl Hubbard, professor of finance at Trinity University in San Antonio. "It depends on how much money you have, how it is invested, what the markets do, how long you live and whether you remain healthy."

Given all those variables, William Bengen, a financial planner in El Cajon, Calif., has developed a series of calculations - widely used by other financial planners - to determine how long a retirement portfolio invested at least half in stocks would last, even with significant downturns in the market.

"If you want your money to last 30 years and you want to give yourself a raise each year to keep up with inflation, you should withdraw about 4 percent of your nest egg during the first year of retirement," Bengen advises.

If you have a $400,000 retirement portfolio, a 4 percent withdrawal would be $16,000. Assuming a 3 percent inflation rate, you could withdraw $16,480 the second year and adjust the withdrawal amount each succeeding year for inflation.

That may be fine if you want to pass money along to your heirs, Hubbard says, but if you plan to consume most of your money during your lifetime, consider a withdrawal rate of 5 percent to 7 percent.

Remember, too, that your desire for travel and entertainment may dwindle with age, so you will likely spend less as you reach 70, 80 or 90.

Portfolios heavily invested in bonds are less volatile than those weighted toward stocks, but they may fail to grow sufficiently to keep pace with your spending needs.

On the other hand, better-than-expected returns one year shouldn't be considered an invitation to withdraw the windfall. Discipline is extremely important.

That may also mean reinvesting part of the withdrawals you're required to take from your tax-deferred retirement plans after age 70 1/2.