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Subject:  Re: Retirement Needs Formula? Date:  10/4/2013  4:40 PM
Author:  joelcorley Number:  73428 of 88497


You wrote, The 4% rule of thumb says nothing about invading principal. You take 4% of your initial next egg the first year, then increase the withdrawal for inflation each year afterward. The historical statistics show that this strategy has a very high probability of the money lasting 30 years. So in the worst case scenario, your year 30 withdrawal takes the last of your principal.

And to add to that ... the 4% rule is using an initial draw figure that starts at the beginning date of the draw-down period. If you need $50K in today's dollars, you might need $100K in say 15 years, which would mean you might actually need $2.5M if you start your draw down in 2028...

- Joel
Exact mileage may vary...
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