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Posted by J.Lef on May 10, 2008, 8:09 pm
Hello to all.
Maybee I can be directed to a better newsgroup if this is an
inappropriate place for this question.
Preparing for retirement in , hopefully in ten years at 65 if health
continues.
I dont understand something. I read all over the internet on the way
to make your investments last, is to withdraw 4 percent the first year, and
then every year add an additional 3 percent to that amount. So by year ten,
you will be withdrawing, 31 percent or so.
Is this rational? Will the money last indefinately if in a moderate
risk portfolio, such as 5 percent returns? (I still have everything in
either mutual funds with vanguard with 90 percent equities, or in a
guaranteed 8.25 percent return rate with my 401k{guaranteed by the state})
It doesnt seem logical to me, how the money will last doing this, but
that is why I am asking here, or to be redirected.
Much thanks.
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Posted by on May 10, 2008, 8:42 pm
> =A0 =A0 =A0 =A0Hello to all.
>
> =A0 =A0 =A0 =A0 =A0 Maybee I can be directed to a better newsgroup if this=
is an
> inappropriate place for this question.
> =A0 =A0 =A0 =A0 Preparing for retirement in , hopefully in ten years at 65=
if health
> continues.
> =A0 =A0 =A0 =A0I dont understand something. I read all over the internet o=
n the way
> to make your investments last, is to withdraw 4 percent the first year, an=
d
> then every year add an additional 3 percent to that amount. So by year ten=
,
> you will be withdrawing, 31 percent or so.
> =A0 =A0 Is this rational? =A0Will the money last indefinately if in a mode=
rate
> risk portfolio, such as 5 percent returns? (I still have everything in
> either mutual funds with vanguard with 90 percent equities, or in a
> guaranteed 8.25 percent return rate with my 401k{guaranteed by the state})=
> =A0 =A0 =A0 It doesnt seem logical to me, how the money will last doing th=
is, but
> that is why I am asking here, or to be redirected.
>
> =A0 =A0 =A0 =A0 =A0 =A0Much thanks.
Hi no this is not rational, please look at this attachment and see if
what It shows will fit your needs http://www.metacafe.com/watch/1151310/saf=
ety_of_annuity/#
you can reach me at maxis29@yahoo.com
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Posted by Ed on May 21, 2008, 5:14 am
"assuming your
portfolio appreciates 7% each year,,,"
Good luck with that.
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Posted by Ed on May 11, 2008, 4:55 am
> Hello to all.
>
> Maybee I can be directed to a better newsgroup if this is an
> inappropriate place for this question.
> Preparing for retirement in , hopefully in ten years at 65 if
> health continues.
> I dont understand something. I read all over the internet on the way
> to make your investments last, is to withdraw 4 percent the first year,
> and then every year add an additional 3 percent to that amount. So by year
> ten, you will be withdrawing, 31 percent or so.
> Is this rational? Will the money last indefinately if in a moderate
> risk portfolio, such as 5 percent returns? (I still have everything in
> either mutual funds with vanguard with 90 percent equities, or in a
> guaranteed 8.25 percent return rate with my 401k{guaranteed by the state})
> It doesnt seem logical to me, how the money will last doing this, but
> that is why I am asking here, or to be redirected.
>
> Much thanks.
It's all relative. It depends on a two major factors.
1. How much do you have saved.
2. How much will you need.
If you have managed to put away $100,000 then 4% of that is $4,000 or about
$333/month.
Saved $1 million, that's $40,000 or $3,333/month.
What you need to live on will be more important in deciding when to retire
than any formula for withdrawal.
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Posted by Fred J. Tydeman on May 11, 2008, 11:43 am
> I dont understand something. I read all over the internet on the way
> to make your investments last, is to withdraw 4 percent the first year, and
> then every year add an additional 3 percent to that amount. So by year ten,
> you will be withdrawing, 31 percent or so.
You misunderstand. It is NOT 4%, 7%, 10%, 13%, 16%, ...
But, 3% of the previous years amount; or
this year = 1.03 * (previous year)
Year Amount
1 4.00%
2 4.12%
3 4.24%
4 4.37%
5 4.50%
6 4.64%
7 4.78%
8 4.92%
9 5.07%
10 5.22%
---
Fred J. Tydeman Tydeman Consulting
tydeman@tybor.com Testing, numerics, programming
+1 (775) 358-9748 Vice-chair of PL22.11 (ANSI "C")
Sample C99+FPCE tests: http://www.tybor.com
Savers sleep well, investors eat well, spenders work forever.
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