Sometimes it doesn't make sense as stated.
If one has $1,000,000 and withdraws 4% over the course of a year but earns 4% over the course of the same year, wouldn't there still be $1,000,000 in the kitty?
Our plan has been to accumulate enough to cover our expenses from interest alone. Probably too high a portion of the retirement assets are in muni's (all insured!), but overall our pre-retirement rate of return has been better than 4% and actually a little over 5% for the last couple of years.
So why wouldn't someone with $1,000,000 earning 4% and withdrawing 4% always have $1,000,000? If things are laddered and inflation occurs so you need more than 4%, wouldn't the earnings go up to?
So why does 4% only last for 25 or 30 years?
I'm trying to get a handle on all this before I join you!
If one has $1,000,000 and withdraws 4% over the course of a year but earns 4% over the course of the same year, wouldn't there still be $1,000,000 in the kitty?
Our plan has been to accumulate enough to cover our expenses from interest alone. Probably too high a portion of the retirement assets are in muni's (all insured!), but overall our pre-retirement rate of return has been better than 4% and actually a little over 5% for the last couple of years.
So why wouldn't someone with $1,000,000 earning 4% and withdrawing 4% always have $1,000,000? If things are laddered and inflation occurs so you need more than 4%, wouldn't the earnings go up to?
So why does 4% only last for 25 or 30 years?
I'm trying to get a handle on all this before I join you!