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S&P500 90 year average is 9.8%. people FIREing typically have nearly all their money invested in low cost index funds.
by desas 8y ago
S&P500 90 year average is 9.8%. people FIREing typically have nearly all their money invested in low cost index funds.
- bryanlarsen 8y agoAnd one of those years the return was -37%. Not a safe return.
- Obi_Juan_Kenobi 8y ago9.8% is not a safe return, no, which is why the safe return is about 7%. The worst-performing 30-year period averaged around 7%, which is what the 4% withdraw rate is calculated from (accounting for inflation). Obviously anything can happen, the world could end, whatever; there's no truly 'safe' option. But it's reasonable.
- bryanlarsen 8y agoIt does assume the continuation of American exceptionalism. I believe that a better benchmark would be a basket of stock markets rather than just the S&P 500. That basket would be dominated by the S&P 500 so it wouldn't change things too drastically, but it would pull that number down somewhat.
- badpun 8y agoYou know what they say in the fine print - past performance is not a guarantee of future results...