4 ms·
To be pedantic, your wealth will erode at the rate of inflation if you spend the exact amount it grows (if you are measuring wealth in dollars, that is). The pr
by lend000 10y ago
To be pedantic, your wealth will erode at the rate of inflation if you spend the exact amount it grows (if you are measuring wealth in dollars, that is). The proper amount is S=G/I where S = spend rate, G = growth rate, I = inflation rate.
- geofft 10y agoThe description above is inaccurate: the four percent rule is the amount that will exhaust your principal over the expected length of your retirement. It's also a conservative number, in that over the period of time studied, the principal never ran out for anyone withdrawing 4%. You can often withdraw more. However, if you're retiring at age 30, the 4% rule is probably way too ambitious (unless you're actively managing your investments).