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Reply to "And that’s the $5M point "
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[quote=Anonymous][quote=Anonymous][quote=Anonymous]The 3/4% percent “rule” is based on zero growth upon retirement. Basically, moving all investments to cash upon retirement. Its simple at best but a foolish strategy [/quote] This is incorrect. The 4% rule assumes a portfolio, typically invested in 50% stocks and 50% bonds, will achieve an average annual return that exceeds inflation by roughly 3 to 4%. If you move your investments to cash, then as inflation rises your money isn't keeping up with inflation, giving you less buying power over your remaining years. [/quote] Yes. Example: run a 3M cash portfolio through Firecalc. 3M starting balance in cash earning nothing. 120K annual spend over 30 years at 3% inflation. It shows 0% chance of success. [/quote]
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