In 2014, as my wealth approaches $500,000, I started exploring whether it is possible to spend $24,000 a year and have that $500,000 last for a long time.
If you divided $24,000 by $500,000, that is a withdrawal rate of 4.8% in the initial year.
If I adjust that $24,000 every year by inflation (e.g the inflation last year is 6%, so next year you spend $25,440 and if the inflation is 4.5% this year, you increase your spending from $25,440/yr to $26,584/yr), I realize spending a 4.8% in the initial year and then constantly adjusting it by inflation is going to blow up that $500,000.
So my article was on the Variable Withdrawal Strategies that allow me to spend $24,000/yr in the initial year, be flexible and systematically adjust my spending, so that it can make $500,000 workable.
You can read Variable Withdrawal Strategies for Financial Independence- The Definitive Guide
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