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I'd probably recommend https://old.reddit.com/r/FatFIRE https://old.reddit.com/r/FatFIRE over /r/pf as it's more likely to have people that have experienced get

I'd probably recommend https://old.reddit.com/r/FatFIRE https://old.reddit.com/r/FatFIRE over /r/pf as it's more likely to have people that have experienced getting a large lump sum like this.

monktastic1 6y ago
FatFIRE is for people who want to live large off their savings (usually understood as >$100k/yr passive income, which generally requires $2.5M+ in invested assets). That doesn't seem to describe OP's position. If FIRE is an interest, then https://www.reddit.com/r/financialindependence/ https://www.reddit.com/r/financialindependence/ is a better bet.
- Justin_K 6y ago
  4% roi is far worse than market and real estate averages.
  - rabidrat 6y ago
    Not anymore.
    - Justin_K 6y ago
      Based upon what?
      - dmoy 6y ago
        It's not 4% ROI, it's 4% withdrawal rate. And even that is not super safe if you're retiring for many decades (the RE part). You can use a variety of online calculators to back test a 4% withdrawal rate - maybe 80% safe, but 20% of the time you'll go broke before dying.
        IvoCass 6y ago
        Why isn't it safe? Or where can I read more on that?
        dmoy 6y ago
        Sure, so there's a few things to look at. The first is going back to the origins of the 4% number in the first place, the trinity study. The parameters for that were a 30 year retirement period, and success was "not completely run out of money after 30 years, 95% of the time". If you extrapolate from that original study, if you retire for more than 30 years (FIRE includes retiring early), success drops from 95%. There's articles exploring that, e.g. https://www.fiphysician.com/safe-withdrawal-rate-early-retirement/ https://www.fiphysician.com/safe-withdrawal-rate-early-retir... https://www.madfientist.com/safe-withdrawal-rate/#:~:text=The%204%25%20rule%20is%20actually,average%20returns%20or%20nominal%20returns https://www.madfientist.com/safe-withdrawal-rate/#:~:text=Th... And then there are a variety of online calculators where you can play with the numbers yourself. The other elephant in the room is pre-Medicare healthcare costs.
  - icedchai 6y ago
    4% is what FIRE folks consider "safe" over long periods of time. It is based on the well-known Trinity study: https://en.wikipedia.org/wiki/Trinity_study https://en.wikipedia.org/wiki/Trinity_study
    - Justin_K 6y ago
      ...but it's still worse than market averages.
      - doingmyting 6y ago
        Yes, that's why it's considered the worst case and a safe bet to withdraw
      - voisin 6y ago
        I think it is 4% nominal, which leaves some excess returns to keep pace with inflation.
koolba 6y ago
I really appreciate linking directly to old reddit rather than the crap default.

I'd probably recommend https://old.reddit.com/r/FatFIRE https://old.reddit.com/r/FatFIRE over /r/pf as it's more likely to have people that have experienced getting a large lump sum like this.

monktastic1 6y ago

FatFIRE is for people who want to live large off their savings (usually understood as >$100k/yr passive income, which generally requires $2.5M+ in invested assets). That doesn't seem to describe OP's position. If FIRE is an interest, then https://www.reddit.com/r/financialindependence/ https://www.reddit.com/r/financialindependence/ is a better bet.

Justin_K 6y ago
4% roi is far worse than market and real estate averages.
- rabidrat 6y ago
  Not anymore.
  - Justin_K 6y ago
    Based upon what?
    - dmoy 6y ago
      It's not 4% ROI, it's 4% withdrawal rate. And even that is not super safe if you're retiring for many decades (the RE part). You can use a variety of online calculators to back test a 4% withdrawal rate - maybe 80% safe, but 20% of the time you'll go broke before dying.
      - IvoCass 6y ago
        Why isn't it safe? Or where can I read more on that?
        dmoy 6y ago
        Sure, so there's a few things to look at. The first is going back to the origins of the 4% number in the first place, the trinity study. The parameters for that were a 30 year retirement period, and success was "not completely run out of money after 30 years, 95% of the time". If you extrapolate from that original study, if you retire for more than 30 years (FIRE includes retiring early), success drops from 95%. There's articles exploring that, e.g. https://www.fiphysician.com/safe-withdrawal-rate-early-retirement/ https://www.fiphysician.com/safe-withdrawal-rate-early-retir... https://www.madfientist.com/safe-withdrawal-rate/#:~:text=The%204%25%20rule%20is%20actually,average%20returns%20or%20nominal%20returns https://www.madfientist.com/safe-withdrawal-rate/#:~:text=Th... And then there are a variety of online calculators where you can play with the numbers yourself. The other elephant in the room is pre-Medicare healthcare costs.
- icedchai 6y ago
  4% is what FIRE folks consider "safe" over long periods of time. It is based on the well-known Trinity study: https://en.wikipedia.org/wiki/Trinity_study https://en.wikipedia.org/wiki/Trinity_study
  - Justin_K 6y ago
    ...but it's still worse than market averages.
    - doingmyting 6y ago
      Yes, that's why it's considered the worst case and a safe bet to withdraw
    - voisin 6y ago
      I think it is 4% nominal, which leaves some excess returns to keep pace with inflation.

koolba 6y ago

I really appreciate linking directly to old reddit rather than the crap default.