Quote:
Originally Posted by vreihen16
It was purely a recruiting thing, since I worked in a non-profit that couldn't compete against the corporate world on salary.
I'm using it for planning purposes, since my account will also need to take care of a younger wife after I'm gone. My personal rate of return has never been below 7% per year.
My now-former employer has a third-party financial/retirement consulting company on retainer for free consultations, in addition to the retirement fund's agents. When I met with the consultant in June and asked what I should do differently, he advised me to leave everything as-is because my return is on par with their canned recommendations.....
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You need returns far greater than 4% to take out 4% as inflation will eat part of it so you need your balance to grow quick enough to cover inflation.
If you had $1 million, got 10% returns each year (taking out $100k a year), each year your balance and what you took out would effectively be smaller. It's why the 4% rule has you taking out $40k and adjusting for inflation each year (if $40k this year and inflation is 3%, you can take out $41,200 next year).
My goal is to retire before I take Social Security (plan to wait until 70 to take it), when I retire early take out 5%, possibly aggressive but I will have the added paycheck of SSI coming in the future so I don't need to take out 5% the rest of my life.
Many say the 4% is conservative but hard for an expert to tell you to go aggressive and hope for the best.