I'm trying to figure out how much I need to retire which has proved more complicated than I expected. This is mainly due to the fact that I don't agree with many "how much do you need" calculators online.
All of them run calculations that take my savings to $0 by the last year of estimated retirement. I've always figured and planned that I would run a strategy to never or hardly ever touch the lump sum amount and only use it to create an income stream. If I can earn 6% of say a $1 Million portfolio, but only take a stream of 3% or $30,000, that remaining 3% gets reinvested at the same rate, adding $20K to the portofio for a next year income of $30,900 or a 3% raise to account for inflation. How would this ever diminish if my rate of return and distribution stay the same?
What am I missing?
All of them run calculations that take my savings to $0 by the last year of estimated retirement. I've always figured and planned that I would run a strategy to never or hardly ever touch the lump sum amount and only use it to create an income stream. If I can earn 6% of say a $1 Million portfolio, but only take a stream of 3% or $30,000, that remaining 3% gets reinvested at the same rate, adding $20K to the portofio for a next year income of $30,900 or a 3% raise to account for inflation. How would this ever diminish if my rate of return and distribution stay the same?
What am I missing?