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Retirement Discussions / Retire Early CampFIRE
|Subject: Re: Retire on $500,000 or less?||Date: 2/19/2000 5:59 AM|
|Author: jpkiljan||Number: 4359 of 794677|
Hello Dehewie, I got lost in the math right away in your post. Could you re-do it showing your work for the first calculations.
I believe you are saying that $500K at a 5% annual drawdown would only last 20 to 25 years counting for interest [inflation, maybe?] A 30 year Treasury Bond (now at 6.2%) pays 24% more than the needed 5% drawdown, but even if it were 5% it should provide $25K a year--over twice the $12.5K you referred to.
But the real numbers are probably even better. According to the much-discussed Trinity study, for most (95% or so) retirees, a mixed portfolio of stocks and bonds should safely yield 5% indefinitely, no mater what happens to the market and will allow for a 4% annual inflation rise, and probably provide you with a substantial estate to boot.
The inflation numbers look okay, but I would counter that SS dollars will be there as expected for people retiring in the next 10 years or so. It is for people who are less than 55 now that SS looks pretty shakey without more taxes on the remaining workforce. Thanks, -- John
>>>but what about less than $500,00 for those who live below their means and don't need much?<<<
If you think you can do it, then more power to you, but I don't see how it's possible not matter how frugal you are. If you had
$500K, and took out 5%, that money would only last you around 20 years, maybe 25 taking account for interest. When do
you plan on retiring? Even if you retire at 65, that money will not last if you live to be 90 or more. And I don't see how