I should clarify: Interest, dividends and growth is what the study is dependent on for the drawdown to work. |
I don’t understand how people can be so stupid. Even if they never leave their little area and don’t have a variety of friends, this is beyond idiocy. If someone in this bubble makes $400,000 and with that they bought a large home, two cars, maybe private school, kids activities, vacations, health care and taxes. How can someone not easily figure out that a single man who lives very frugally can manage on 75,000 and even save some of that? |
Withdrawing $75K in savings per year is not at all equivalent to an earned HHI of $75K. The former generates no opportunity to earn SS credits, acquire employer-sponsored benefits, contribute to a 401k, receive employer-sponsored pay raises, etc…. Why is everyone here so stupid? |
This goes without saying. The discussion is about options and plans given the circumstances. Not everyone is a: Well, it's going to be what it's going to be person. Clearly that is not OP, but is OP's brother. And if I was OP, I could see OP's brother showing up on his doorstep in 20 years with: Dude, I am broke. Need money. |
Nobody is saying it is the same. That’s not the question posed by OP. The question is can you live off of $1.5MM of inheritance plus free house. The answer is sure you can. Invest the $1.5MM in a safe asset…live off just the interest as long as you can (maybe even save some in early years and grow the principal). You earn $70k in annual interest. Also, nobody is saying it’s a great idea…but I bet plenty of working stiffs that earn $40k a year with no savings would trade places with this kid in a heartbeat |
You clearly can't read, or are too caught up in your own issues, because it has been stated REPEATEDLY that the PP who threw out 75K/year was wrong. The 29 year old is looking at 45K/year if he's lucky, and probably won't get SS benefits or won't have paid into Medicare. Someone working, even making 45K is paying into SS and Medicare. |
Hah this is actually good advice. I'm surprised more single guys aren't expats. I know several people living in Colombia on 20-30k per year. |
Actually, the best advice of the entire thread. OP's brother needs to sell the house and move to another country. |
Scrub gets the house and 1.5. He’s a financial fool as OP points out. Makes poor financial decisions. Don’t bail him out OP. And make sure he knows this. |
+1 Invest the 1.5 mil in vtsax or VT and withdrawal 3%/yr. More than enough (45k) to have a decent lifestyle, and even though this guy is a slug, he should be able to date women significantly better than your average woman in the US. |
Yes honestly, I feel constrained sometimes. I take ubers regularly. And I am a 40+ mom who works. Hard to imagine most 29 year olds just taking the bus around for the rest of his life. the people I know who live off the grid you already know that about them. This 29 yr old just sounds lazy. I think we all know he has a car or will spend $$ on uber. |
IN THEORY. Look up Sequence of return risks. |
This |
Very familiar with sequence of returns lol What withdrawal rate would you use? |
For those who don’t know sequence of return risk: Sarah, a retiree who begins her retirement with a $1 million investment portfolio. Sarah plans to withdraw $40,000 annually for living expenses, adjusting for inflation each year. She has a well-diversified portfolio consisting of 60% stocks and 40% bonds. Scenario A, the early years of Sarah's retirement experience positive investment returns. The stock market performs well, and her portfolio grows by 8% in the first two years. As a result, her portfolio balance after the second year is approximately $1.166 million. However, in Scenario B, the sequence of returns is unfavorable. The first two years of Sarah's retirement see negative investment returns, with the portfolio declining by 10% each year. After the second year, her portfolio balance drops to around $810,000. Even though Sarah will be withdrawing $40,000 each year no matter what, there is sequence risk due to the amount she will be reducing her overall portfolio. In Scenario A, where positive returns occur early in retirement, Sarah's portfolio experiences growth, and she withdraws $40,000 annually. In contrast, in Scenario B, the negative returns in the early years, coupled with annual withdrawals, lead to a more significant reduction in the portfolio balance. For Portfolio A, she would still have over $1,000,000 after the first two years; for Portfolio B, she would at less than $750,000. How to mitigate sequence risk 😂 Consider working as late as you can in order to contribute more to your retirement account, particularly in your peak earning years. https://www.investopedia.com/terms/s/sequence-risk.asp |