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Home Yakezie Forums Bloggers Lair How to Retire Early

How to Retire Early
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1:24 am
February 22, 2014


Tortoise Banker

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posts 35
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Since we're a community of personal finance bloggers, wanted to take the pulse of the forum on what a wise recommendation would be for a hypothetical individual looking to retire at 47 with $3,500,000.

 

I wrote a post yesterday trying to hone in on a solid method for doing this, and came up with a 2.5% annual withdrawal rate adjusted for inflation. 

 

Do any of you disagree?  I've heard 2% to 3% is sustainable assuming one has the right asset allocation. 

 

Anyway, eager to hear your thoughts!!  Thanks.

Charles at The Tortoise Banker

Blog: http://www.tortoisebanker.com/

Twitter: @TortoiseBanker

Email: slowandsteadytortoise@hotmail.com

Personal finance advice from your neighborhood tortoise.

1:37 pm
February 26, 2014


RootofGood

North Carolina

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I pulled the plug at 33 with a ~3% withdrawal rate.  I'm close to 100% equities, so inflation should be covered easily.  My dividend yield is over 2%, so I'm almost to my withdrawal rate with dividends and a tiny amount of selling principal.  Or as it turns out, I can make the other 1% from hustles like my blog, ebaying stuff, freelance writing, etc.  So more like a 2% WR + minor part time income.  

 

Bond yields today suck, so I think 2.5% is probably good if you want 30-40%+ bonds in a portfolio to dampen the volatility.  

 

The standard rule of thumb is 4% adjusted for inflation has a 95% chance of lasting 30 years.  If I were 47, I would plan on more than 30 years unless SS is a big part of the plans.  

Justin @ Root of Good

Join me in my journey through early retirement at age 33!

Rootofgood.com

Facebook: RootofGood

Twitter: @RootofGoodBlog

1:30 pm
February 27, 2014


annielogue

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If you annuitize the $3,500,000 at 3% interest for 40 years, you get an annual payment of $151,418, which is 4.33% of principal. Withdrawal rates are tied to annuitization assumptions. But that gets you down to zero at age 87.

Also, is this to support one person or two? If two, you need to consider the life expectancy of the younger person.

 

Annie

Low Finance. High Finance: Spend less than you earn, get a return that beats inflation

The Root of All: http://www.therootofall.com @annielogue

Chicago on the Cheap: http:www.chicagoonthecheap.com @chicagocheap
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