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Figure out what number you can live on and compare that to the expected growth of your investment. If you have $1 million and you assume a 6% growth rate, you c
by mycentstoo 6y ago
Figure out what number you can live on and compare that to the expected growth of your investment. If you have $1 million and you assume a 6% growth rate, you can live on 60k and not work. If you want less risk, assume a lower growth rate. If you want a higher standard of living, work until your nest egg provides a greater income through investment.
- Negitivefrags 6y agoDon’t forget inflation and taxes. Your 6% might only give you 48k after tax. Subtract 2% for inflation and it’s only 28k per year you get to live off in perpetuity.
- garmaine 6y agoYou're not going to be paying much (federal) taxes on that capgains income.
- lhl 6y agoThis is correct. In the US, currently if you are making no other income (AGI), your LTCG will be 0% for the first $40K. Bonds or other tax-inefficient (STCG generating) vehicles should be rebalanced into tax-deferred accounts (if the OP has been working in tech, unless they've been completely reckless, they should have a healthy 401k to work with) - it's very possible that an individual retiring on $1M and aiming for a SWR would pay $0 in federal income tax.