We’re doing Vanguard ads now?
Note... Let’s assume $115,000/yr was the pre-retirement income. Statistics suggest that about 75% of that should be needed in retirement to maintain standard of living due to changes in lifestyle and taxation. That gives us an assumed income need of $86,250/yr.
Then, there’s Social Security. Let’s go with about $2,500/mo for an average... and you’re taking it early at age 65. That gives us a need of about $56,250/yr from the portfolio. If we’re assuming a growth rate of 5.6%/yr, you should see a declining balance over time... initially not rapid but eventually growing in pace.
If we start retirement at a market high and initial returns are lower than average, it will accelerate the decline. If you can afford to retire nearer a market low, you will probably have a smoother ride.
Have a nice day.
Ah, the old sequence of returns issue. How can one tell when the market at a high or a low?
bkmk
Very well said. I was about to post the same points but you made them more succinctly than I could have.
A million dollars is a decent retirement plan nest egg, if you assume social security is there and you don’t live like Kanye Kardashian.
I do think that for people in their mid- 50s a visit to a serious fee-only financial planner is a few thousand dollars that might be well spent. Not a salesman, just a planner.