Question on how the SWR is calculated when people say their might be 4% or 3 % etc.
If I have a $4.5M nest egg (assume all in taxable accounts)
If I earn 2% interest =. $90K/year
Assume 20% taxes (just a guess) =. $18K year in taxes
Net interest income after tax =. $72K
My annual spending is $120K a year
So I need $48K in addition to net interest income to cover the living expenses.
So is my SWR $120K/$4.5M = 2.66%?
or is it the net amount needed after interest of $48K/$4.5M =1.01%?
Thanks for your help
If I have a $4.5M nest egg (assume all in taxable accounts)
If I earn 2% interest =. $90K/year
Assume 20% taxes (just a guess) =. $18K year in taxes
Net interest income after tax =. $72K
My annual spending is $120K a year
So I need $48K in addition to net interest income to cover the living expenses.
So is my SWR $120K/$4.5M = 2.66%?
or is it the net amount needed after interest of $48K/$4.5M =1.01%?
Thanks for your help