What will your plan leave your grandchildren?

It grows your savings by the pre-retirement return and your contributions until retirement, then, at the (usually lower) return in retirement, withdraws your chosen percentage in the first year and raises that amount with inflation each year. Whatever is left at the end of the plan is reduced by your heirs’ tax rate and divided among your children or grandchildren.

Money in traditional 401(k)s and IRAs has never been taxed. When heirs withdraw it, it is generally taxed as ordinary income, and most non-spouse heirs must empty an inherited account within ten years. Roth accounts are different, so set the heirs’ tax rate to match your accounts.

The 4% rule is a common rule of thumb for making savings last about 30 years, not a guarantee. Real returns vary from year to year, and a bad market early in retirement can matter a lot. Treat the result as an illustration.

Families use many approaches: saving more, spending less in retirement, Roth conversions, life insurance, trusts and lifetime gifts. Which fit depends on your taxes, health and goals, so talk to a qualified professional before acting.