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Investing/Strategies / Retirement Investing
|Subject: Re: Income Planning Assumption||Date: 6/5/2007 10:12 PM|
|Author: clifp||Number: 57791 of 81982|
I think we maybe confusing Rhoski.
As Bruce alluded to there are two seperate concepts: Total returns and a safe withdrawal rate (SWR).
In general, for a stock heavy portfolio say 60-80% stocks and the remainder in bonds or cash (including CDs). You can expect over the long term 20-40 years to see a total return between 7-9%.year going forward. Note this is slightly below the historical results.
However, you can not actually safely withdraw that much money from your portfolio. This for two reasons inflation, and the large variations in the stock market in the short-term.
As good rule of thumb if you have a $1 million portfolio you can safely withdraw 4% or $40,000/year and each year safely increase the amount you withdraw to keep up with inflation. The 4% rule is subject to a lot of debate, and the board can provide you with more resources and reading material than you'll want. :-)
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