|
The premise of a 4% safe withdrawal rate is to maintain a constant standard of living but we all know that life does not stand still. New things are created which advance the standard of living. Productivity boosts incomes 1% over inflation over the long term. It would take this to maintain one's position in society. In addition one may want to retire and grow rich, continuing to advance one's place in society.
I was thinking of starting with a SWR less than 4% but allow the rate to increase above inflation. If one started with a 3% withdrawal but increased this by 2% more than inflation, the portfolio should still grow faster than the withdrawal rate. It would take 14 years just to reach a 4% withdrawal rate of the original sum and the portfolio should have grown enough to make it much less than that. Has anyone addressed this before? I have some calculations to do.
|
Threaded Mode
