Title: Can Sarah Sustain a 5% Withdrawal Rate from her $1 Tagline: Can Sarah Sustain a 5% Withdrawal Rate from her $1.8M IRA While Growing her Legacy? Problem: Sarah, a 68-year-old widow, recently inherited a $1.8 million Traditional IRA. She wants to withdraw 5% annually ($90,000) to maintain her current lifestyle. She's concerned about inflation eroding her purchasing power and wants to leave a substantial legacy for her grandchildren. Her financial advisor suggests investing in a mix of stocks and bonds, but Sarah is unsure if the potential returns are sustainable given her withdrawal needs and the current economic climate. She needs to determine the maximum sustainable growth rate (SGR) her portfolio can achieve without depleting her assets prematurely, considering dividend reinvestment, expense ratios, and potential tax implications within the IRA. Solution: By using the Sustainable Growth Rate Calculator, Sarah can analyze her portfolio's potential return on equity (ROE), retention ratio, and dividend payout ratio to determine the maximum sustainable growth rate that allows for her 5% withdrawal while preserving capital. She can then compare this SGR to potential investment opportunities and adjust her asset allocation accordingly. This ensures she's making informed decisions to meet her income needs, combat inflation, and build a lasting legacy for her family. ROI: By optimizing her portfolio based on the SGR, Sarah can potentially increase her portfolio's longevity by 10 years, ensuring she can comfortably meet her $90,000 annual withdrawals and leave a larger inheritance for her grandchildren. This could translate to an additional $500,000 in legacy assets over the long term, based on a conservative growth estimate. Furthermore, understanding the SGR allows Sarah to make informed decisions about dividend reinvestment, potentially increasing her portfolio's growth by 1-2% annually, representing an extra $18,000 to $36,000 gain per year on her $1.8M starting balance. Description: This calculator helps Sarah, a new retiree, determine the maximum sustainable growth rate for her inherited IRA to ensure long-term financial security and legacy planning. Optimize your portfolio for growth and longevity with Golden Door Asset. Category: Client Service