Quote:
Originally Posted by MonkeyMama
Since I am 30 I have to go with the "no idea." I haven't really run the #s.
I think one of the biggest unknown factors for the young folk is longevity. A lot of my family has lived to 100 (like in the 80s) and now you hear life expectancy is going up at a rapid pace.
Then there is inflation and everything.
It would have to be many millions. Mostly I am way to risk adverse to retire so young. If I was on the brink of being able to, financially, I'd wait it out a bit.
I really haven't run the #s though. When I figure retirement #s I usually assume I'd live 40 years after retirement. I am not sure how the numbers change if the years significantly increase.
I wouldn't need much to live on today, but I'd want to make sure I was prepared for inflation for the next 100 years, just in case. I still have kids to put through college and all that too... So all that leads me to the conclusion that I would need many millions.
Yeah, I would have no desire to retire so young anyway.
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I would suggest looking up the trinity study. This will educate you on the longevity of portfolio's. That is where the 4% rule generally comes from.
A 60-40 equity/bond mix can last 30-40 years (based on past market performance) if 4% of portfolio is withdrawn per year (increased each year for inflation).
A 100% equity portfolio takes on more principal risk. If that porfolio had a 3% yield, it would be worth more at death than it would during withdraw. Lowest withdraw rate needed is 3%, assuming you could find a 3% yield (S&P 500 yields 2.2%, so slightly more yield is needed than the market itself). Even if the principal dropped 30% in a year, the dividend payout would probably not change (dividend paid per share).