16d • 💬 General Chat
The 4% rule
An easier way to think about the 4% rule is this...
First you need to determine what you can comfortably live off in retirement. If your comfortable # in retirement is $50k then you will need to figure out how much of that must come for your portfolio and multiply it by 25.
Let me explain..
Example 1: No Other Income
If you dont expect any other income sources and you will need to get the entire $50k from your portfolio then you simply multiply your comfortable retirement # number by 25.
- 50,000 x 25 = $1,250,000
This means you should have a portfolio goal of 1.25 million to be able to withdraw 50k per year using the 4% rule.
If you're expecting to receive additional income from another source (social security, pension, military etc.) then you will need to subtract that amount from your comfortable retirement number of 50k.
Example 2: Additional Income Source
If you expect $24k a year from social security that means you will only need $26k in income from your portfolio.
26,000 x 25 = 650,000.
Your portfolio goal shrinks to only $650,000.
These are just easy estimates. You may have less or more. But just a simple way to think about your retirement number and portfolio goals.
If you want me to run your portfolio goal just comment the salary you want, if there is an additional income source (or not) and how much.
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The 4% rule
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