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Rule of thumb is withdrawing 4% per year is a safe rate that will weather market turmoil if your assets are returning market average rates. A $1.4M portfolio w
by revicon 5y ago
Rule of thumb is withdrawing 4% per year is a safe rate that will weather market turmoil if your assets are returning market average rates. A $1.4M portfolio will allow for a safe $56,000 withdrawal per year.
- typest 5y agoThe problem is that a rule of thumb is about averages, not edge cases. For a really long retirement, you are going to hit a lot of edge cases. The 4% rule was based off the Trinity study, which looked at 30 year retirements and assumed the retiree would deplete their principal. It is not a safe basis for a long retirement.
- buzzy_hacker 5y ago“ Notably, it appears that the safe withdrawal rate does not decline further as the time horizon extends beyond 40-45 years (given the limited research available); the 3.5% effectively forms a safe withdrawal rate floor, at least given the (US) data we have available.” https://www.kitces.com/blog/adjusting-safe-withdrawal-rates-to-the-retirees-time-horizon/ https://www.kitces.com/blog/adjusting-safe-withdrawal-rates-...