bad advice.
you shouldn’t be taking ANY of your principal during retirement... you should be living off the interest or the cash flow generated by the funds.
Agree!!!
Please explain to me how someone could live off $1 million without touching principal. I am woefully undereducated financially but in my situation that is probably how I will end up.
Why would you avoid touching prinicpal?
So, if you have $1 million in this example, live off the earnings, then when you pass away, what of the $1 million principle remaining? Do you want to leave money to heirs, to charity perhaps? Do you want to make sure money is left over for a younger wife who is likely to outlive you?
I think it depends on if you want to have substantial funds remaining after you have passed away.
IRA rules require taking a % each year from your account beginning at year 70.5. You can reinvest it of course but there is a tax due on this “income”.
you shouldn’t be taking ANY of your principal during retirement... you should be living off the interest or the cash flow generated by the funds.
I disagree, your advice is the bad counsel.
Depending on how it is invested, periodic withdrawals are a well-recognized and legitimate retirement strategy.
If all of my money is invested in dividend-paying stocks your method may work, but it is very risky and can lead to great disappointment. It is far superior to invest in low-cost index funds and take periodic withdrawals. There are numerous well researched methods for doing this, but the real key is low cost index funds and avoiding financial advisors who will charge a lot to add little value.
Nope. If you have a big enough pile there is no problem with spending down SOME of the principal, if for no other reason to minimize estate taxes.
you shouldn’t be taking ANY of your principal during retirement... you should be living off the interest or the cash flow generated by the funds.
You put a period where a colon should be.
bad advice:
you shouldn't be ........
“you shouldn’t be taking ANY of your principal during retirement... you should be living off the interest or the cash flow generated by the funds.”
Easier said than done if retirement funds are subject to required minimum distribution rules of IRA etc..... unless you are a younger retiree and willing to assume some investment risk.
Or the building/buildings it bought for you.