How much should you save for a 'modest' retirement? What if we said $8 million
The 4% Rule has long been used as a guideline for retirees in determining how much they should be able to withdraw from their retirement account while still maintaining a balance that will allow for the same income stream to flow through their golden years.“ ‘The 4% Rule as a safe withdrawal rate in retirement is dead.’ ”
“Therefore, of course you could withdraw 4% without any fear of running out of money when you could earn 1% more risk-free,” the Financial Samurai said. “You can use the 0.5% Rule as a safe withdrawal rate guide once you’ve reached retirement or financial independence,” he said, drawing more than a few virtual spit-takes from readers.“Or you can use the 0.5% Rule as a stretch net worth target,” he added, operating under the goal of leaving the nest egg untapped. “To find out how much net worth you need to declare financial independence, multiply your desired annual expenses by 200.
“As two unemployed parents, amassing a $30 million to $40 million net worth appears next to mission impossible,” the Financial Samurai wrote. “However, at least the 0.5% Rule has provided a new net worth target to shoot for. Now we’ve got to figure out whether it’s worth both of us trying to find day jobs again and not seeing our kids all day for the sake of more wealth.”
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