Is this the bottom line retirement planning financial question?
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How much is enough? A lot of people knock it as too simplistic but I think the 4% rule (or 5%) is very good.
determine how much you need per month and deduct any income you have for certain such as pension and social security
if you need more money than from the certain sources, divide that amount needed by .0033 (or to be less conservative .0041) and that is how much principal you need to invest
that 4 or 5% draw only refers to the income side of things and its success rate of lasting . . it makes no assumption about money left for heirs , big medical expenses , emergency spending that exceeds budget and all those home repairs and eventual renovations that cost amounts that drive the yearly budget out of bounds .
a well designed plan does not rule these things out but plans and allows for them . things are far more complex in the real world then take 4% , inflation adjust and have a nice life .
Last edited by mathjak107; 12-30-2015 at 12:01 PM..
that 4 or 5% draw only refers to the income side of things and its success rate of lasting . . it makes no assumption about money left for heirs , big medical expenses , emergency spending that exceeds budget and all those home repairs and eventual renovations that cost amounts that drive the yearly budget out of bounds .
a well designed plan does not rule these things out but plans and allows for them . things are far more complex in the real world then take 4% , inflation adjust and have a nice life .
It will be interesting how folks react with a few flat years of returns along with a bear market. Perhaps recent returns have altered realistic planning.
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