The Motley Fool Discussion Boards
Investing/Strategies / Retirement Investing
|Subject: Re: Balance of Retirement Funds||Date: 9/10/1999 11:43 AM|
|Author: FoolishLikeaFox||Number: 13839 of 82794|
A word of caution about your expected withdrawal rate. $55,396 is about 6.5% of $842,000. Lots of dicussion here and other places in the past have suggested/shown this is much too high a withdrawal rate under anything but ideal circumstances which Life never is. The quoted safe figure varies, but seems to be about 4% to 5%. Reading previous messages on this board would provide a wealth of opinions.
I urge you go to the Retire Early homepage
and check out the article and spreadsheet on Safe Withdrawal Rates. It (along with links) goes into a lot more detail than this thread accounting for real world probablilities of running out of money before running out of heartbeats, given unforseen circumstances. For instance, suppose you're 70% in stocks, and it's 1972, or even better yet, it's 1928.
But don't be discouraged. Two years ago, when I made very optimistic assumptions about withdrawal rates, but had no clue that as an individual, I could control my investments effectively, I figured I'd have to work till I was cold and stiff (twenty to forty years from now). Now it appears a life of leisure is five (optimistically) to ten (pessimistically) years off
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