Reply to How much to retire at age 55? We are 50

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Reply to "How much to retire at age 55? We are 50"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]According to Standard and Poor's, the average annualized return of the S&P index, which later became the S&P 500, from 1926 to 2020 was 10%. At 10%, you could double your initial investment every seven years (72 divided by 10). In a less-risky investment such as bonds, which have averaged a return of about 5% to 6% over the same time period, you could expect to double your money in about 12 years (72 divided by 6).[/quote]

I get this.  But OP's $100 million figure assumes that they will spend nothing, not a penny, for 40 years.  [/quote]

The will spend 120k of income from investments.  On average over that time their stash will continue to grow as the are only using about a third of their expected gains.  [/quote]

I know that. But the $100 million figure assumes that [i]everything[/i] earned will be invested and continually compounded.  Yes, the principal will continue to grow if OP spends less than the principal earns.  But taking out 1/3 of the earnings changes the equation considerably.     [/quote]

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