marko
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Mar 16, 2011
- Messages
- 8,505
Slow Sunday morning at the marko household.
Just for fun, I was wondering if I could figure how much my portfolio would last if I literally cashed it all out, put it in a bank vault and withdrew 8% of each year's balance.
My compounding model subtracted 8% from each previous year's balance. I figured 8% to accommodate 3% inflation and 5% spending. To my surprise, in 20 years (age 90) I'd still have a respectable balance; enough for another 5 years. Even at 10% I'm still good.
Now, most here know how mathematically challenged I am so I'm wondering if the model is correct.
Yes, I do realize that spending/expenses/inflation are non-linear but without having to account for portfolio growth (which is very non-linear) I'm curious if I'm on the right way of thinking.
Just for fun, I was wondering if I could figure how much my portfolio would last if I literally cashed it all out, put it in a bank vault and withdrew 8% of each year's balance.
My compounding model subtracted 8% from each previous year's balance. I figured 8% to accommodate 3% inflation and 5% spending. To my surprise, in 20 years (age 90) I'd still have a respectable balance; enough for another 5 years. Even at 10% I'm still good.
Now, most here know how mathematically challenged I am so I'm wondering if the model is correct.
Yes, I do realize that spending/expenses/inflation are non-linear but without having to account for portfolio growth (which is very non-linear) I'm curious if I'm on the right way of thinking.