I know there are many options for this, but the safest seems to be to get a lump sum of cash and put it in a very safe investment that produces regular returns. I realize T-bills and CD rates are unacceptably low right now, but these would be the type of investments I would think most would put that lump sum in.
I looked up historic CD and 30 year T-bill rates and saw some very high rates but that 5-6% were not uncommon in years where we were not in a recession. If this was the case, why would you have to lower your SWR based on your age at retirement? For example, if I have $2 mill and am able to buy a 30 yr T-Bill with an interest rate of 6%, then I can still have an SWR of 4% and give myself an annual 2% raise.
I feel like many retirement calcs I use take your lump sum and deduct the 4% but aren't adding the interest you are gaining back into it thus eliminating any use of the lump sum.
I looked up historic CD and 30 year T-bill rates and saw some very high rates but that 5-6% were not uncommon in years where we were not in a recession. If this was the case, why would you have to lower your SWR based on your age at retirement? For example, if I have $2 mill and am able to buy a 30 yr T-Bill with an interest rate of 6%, then I can still have an SWR of 4% and give myself an annual 2% raise.
I feel like many retirement calcs I use take your lump sum and deduct the 4% but aren't adding the interest you are gaining back into it thus eliminating any use of the lump sum.
