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This 4% is really only a first year estimate and is a reasonable target. Although if you include several other asset classes, real estate, precious metals, foreign and high yield debt and diversify to more equities than the S&P500, a portfolio can actually survive history with over 5% inflation adjusted withdrawal rate. You would then need about 20 times the annual amount you plan to spend from the account.

The reason I call the 4% a target is because, if you have returns of 15%, then you could take out at least 10% and still have a better chance of you portfolio lasting 29 years than in the historical testing.
Not suggesting you always take out the full returns, but just to note, if 4% is the worst maybe you are not getting the worst and you should be able to enjoy your retirement!!


Interesting post.
Thank you.
And thanks for the welcome.
Much appreciated.

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