daylatedollarshort
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Feb 19, 2013
- Messages
- 9,358
Actually, I believe these results require a flat TIPS yield curve in addition to a 0% real YTM.
A yield greater than 0 real increases these SWR higher, per the TIPS links previously posted. With a zero real yield, you'd just divide your beginning portfolio / years of retirement = SWR.
$100 beginning portfolio / 50 years = you can take out $2 a year.
100/50 =2.
1,000,000 / 50 = 20,000.
For a couple, annually this could mean:
$20K SWR ($1M portfolio, 0 real return, 50 year horizon) + $24K SS + $14K rental income = $58K retirement spending.
At age 90 annuities are pretty cheap or maybe the hypothetical couple in the above example has a $500K house for a reverse mortgage, to avoid depleting the portfolio to zero.
Instead of firecalc, you can just use a spreadsheet with inflation and real return as parameters to model your retirement planning under this methodology.