What do we do with Asset Base when computing return requirement in say 1 year?

CFA Level III
#1

If we are told to calculate the return for the persons first year in retirement and we are given today’s current asset base - do we need to make any adjustments to it?

For example there was a person retiring in 1 year and they said that their savings account would earn 100k in interested during the year.

The Asset Base added 100k from interest income to the base.

I am unsure whether in these questions we take TODAY’s asset base or whether we need to make upwards adjustments?

Thanks

#2

Returns are calculated based on how much they have returned (let’s say) since the past year. So the denominator would ideally be the end of the previous period/beginning of the current period. I think what affects the asset base is liquidity needs. Like paying for education or other significant cash outflows happening within a year of calculation.

#3

Add year 0 cash flows to the asset base

Divide spending needs in year 1 of retirement by asset base @ the end of year 0