Reply to And that’s the $5M point

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[quote=Anonymous][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]

I'm curious what you think this "analysis" shows.  The reason that it has a 0% chance of success has nothing to do with inflation, it's that $120k for 30 years is $3.6m, and you are starting with $3m and assuming no growth.  If inflation were 0 forever, the nest egg would still only last 25 years.  If you need Firecalc to tell you this . . .

You have effectively demonstrated that $3m is less that $3.6m.  Congratulations, I guess.

P.S. Please retain the services of a financial planner, and perhaps a 5th grader to help you with the math.  [/quote]

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