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I agree with the comments that the methodology is flawed and the conclusion overly alarmist. One of the things my grandfather would say was "You don't have to w
by ChuckMcM 7y ago
I agree with the comments that the methodology is flawed and the conclusion overly alarmist. One of the things my grandfather would say was "You don't have to worry about running out of money if you're living off the interest." He had lived through the depression and would tell stories of people who were spending savings to "keep up appearances" and it cost them everything.
- NTDF9 7y agoBut one can't live off the interest any more because we've manipulated the system to close to zero interest rates. To be able to earn 20k, single person survival income, that individual needs $1M in savings. Times from our grandparents times have changed. The problem is very clear. Higher interest rates boost savers, at the expense of risk takers (some good, some bad). Instead, we've goosed the economy for so long with low interest rates that savers got bit by inflation and speculation has become a way of life.
- ChuckMcM 7y agoApparently you need $715,000 in an SPX index fund in 2000 to reliably pull $24K/year ($2K/month) out of it. I made a toy model for that : https://docs.google.com/spreadsheets/d/1pBoa2mikeKQ4zPHOHu6La_PA5Uk-lr8Srkcx9oaMGlM/edit?usp=sharing https://docs.google.com/spreadsheets/d/1pBoa2mikeKQ4zPHOHu6L...