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Not forever. In 20 years that $40K will lose half of its purchasing power. Plus unless you can magically guarantee 4% returns a year, you will be getting less a
by olegkikin 9y ago
Not forever. In 20 years that $40K will lose half of its purchasing power. Plus unless you can magically guarantee 4% returns a year, you will be getting less and less out every year.
- dugmartin 9y agoThe 4% number is a common retirement rule of thumb. It assumes a 7% return on your investments with a 3% rate of inflation so you can take 4% out forever without touching your inflation adjusted principle.
- johnsonbigg 9y agoThat 7% return goes down to 4 when you factor in taxes so the actual safe withdrawl rate is less than 1%
- quuquuquu 9y agoWhich is why I avoid the whole investing charade all together and just cut my expenses instead! Woohoo! No mortgage, no marriage, no restaurants, no fancy gadgets, just a nice relaxing low cost of living life with friends who feel the same way. Every once in a while I take some controlled investing risks, but hell if I would ever plunk 300k in a mutual fund and just safely assume everything will be fine when I check it 30 years from now.