4 ms·
My post wasn’t clear, sorry. I consider FU to be >$10M. So I would think folks in my boat would have $5-$9M in assets. I don’t think $4M is enough for the burn
by throwawayretire 5y ago
My post wasn’t clear, sorry. I consider FU to be >$10M. So I would think folks in my boat would have $5-$9M in assets. I don’t think $4M is enough for the burn rate I’ve described. It’s close though so sure if someone here retired at $4M then would still be happy to hear about it.
- matt_s 5y agoCurious then if you are simply not investing it at all? Average returns over 10 years for something like VTSAX (total stock market index) is 13%, granted the last 10 years has been a bull market. 13% of $4M is $520k even half that is $260k before taxes which I think is comfortable to live on, exception of HCOL areas.
- deanmoriarty 5y agoThere is sequence of return risk. The average return by itself can hide that risk. Imagine if the day you retire you experience a series of bad crashes, followed by years of stagnant growth, and finally the last couple decades of your life of massive growth. In that case, the average will tell you one thing, but in reality you’ll be destitute because you’ll have to consume your capital during those early years while it is depressed. A Monte Carlo simulation is the best practical estimation for looking at that. I believe that historically a ~3% withdrawal rate was the highest you could go, for retirement periods of 50 years or longer with substantial equity investments.
- throwawayretire 5y ago3% withdrawal for 50 yr equity based retirement is interesting. Hadn’t heard that before. Our burn rate is between 2-3%. So we may in fact be done.