3 ms·
the 3% rule accounts for inflation. Average nominal return 7-10%, inflation of 3.5% average, leaves you 3% withdrawal with no decrease (or even an increase) in
by aketchum 2y ago
the 3% rule accounts for inflation. Average nominal return 7-10%, inflation of 3.5% average, leaves you 3% withdrawal with no decrease (or even an increase) in principle in real dollars
- tunesmith 2y agoThat's not what the 4% rule means. The 4% rule (modified to 3% by OP) is what you can withdraw without running out of principle. Maintaining the level of principle is a different thing entirely. Average nominal should be ignored anyway. It's never been a practical number for the individual investor to rely on. Mistakes, allocation models, people having less to invest when times are bad (and market is low), etc.