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Spending down your principal may not be a smart idea though, especially if one is in good health. It runs the risk of them outliving their savings. Spending 4%
by drew1492 9y ago
Spending down your principal may not be a smart idea though, especially if one is in good health. It runs the risk of them outliving their savings. Spending 4% or less of your assets annually is sustainable indefinitely, statistically speaking.
- TheCoelacanth 9y agoThat's optimal from an individual perspective, but not necessarily from a societal perspective. The author suggests it might be better if people had insurance which paid an annuity after reaching a certain age (say 80) and then people could plan to have their savings run out at 80 instead of everyone having to plan to live until 100 with only a tiny fraction making it to that age.