3 ms·
check firecalc.com for historical likelihood of portfolio success, given a starting nest egg and an annual withdrawal rate. The 4% withdrawal rate mentioned abo
by CompelTechnic 8y ago
check firecalc.com for historical likelihood of portfolio success, given a starting nest egg and an annual withdrawal rate. The 4% withdrawal rate mentioned above is very likely to succeed for an indefinite period, and 3% is essentially impossible. This is all assuming 85% US equities and 15% bonds, and that the future looks vaguely like the past 150 years.
Despite all the skepticism above, the 4% claims are true. Not 100% chance of indefinite success, but close enough to be actionable. You can also google the "trinity study" for more info.
- forrestthewoods 8y ago$100,000 per year for 50 years with a $2,500,000 base has a 79.67% success rate. So pretty likely. But not guaranteed. And for sure not indefinite. Not if you pull the same 4% during down years. My dream is 5,000,000 and a paid off house. I can live off 3% of that for sure.
- zaccus 8y ago85% in equities during retirement is a bad idea.
- CompelTechnic 8y agoThe longer the duration, the more it is a good idea to be heavy in equities. This can be teased out of the data on firecalc.
- zaccus 8y agoIf you're buying equities and leaving them alone for decades, sure. But if you're retired and depending on your investments for an income, being 85% in equities is insane. One prolonged bear market could wipe you out.