3 ms·
Just FYI that investment is quite dated. Modern advice is to invest heavily in stocks--even as much as 90% stocks, 10% bonds--then withdraw no more than 4% of t
by garmaine 6y ago
Just FYI that investment is quite dated. Modern advice is to invest heavily in stocks--even as much as 90% stocks, 10% bonds--then withdraw no more than 4% of the original balance, corrected for inflation, per year. Historical back-testing as well as stochastic modeling shows that in this way you can expect funds to remain indefinitely.
(The details are a bit more complicated, and you might want to choose a smaller percentage like 3.5% or 3% if you are retiring at a younger age.)
- alltakendamned 6y agoThe definition of indefinitely in the trinity study which you seem to refer to is 30 years.
- garmaine 6y agoNo the trinity study (and its follow-ups) only run simulations for 30 years, but they did not say that the funds would run out in 30 years. To be precise: the success criteria was that the portfolio survived for 30 years, but the actual outcome was that most portfolios had more than the original principal at the 30-year mark. Which would imply indefinite survival.