- Your spending tends not to ...
Suppose you need to spend $40,000/yr the next year for your family.
Based on the proverbial 4% Safe Withdrawal Rate, you would need to accumulate $1 million in order to seriously think about whether both spouse could both retire or not.
The 4% withdrawal rate is tested through historical rolling 30 year periods, on a 50% equity 50% bonds allocation. 4% gives a high probability your money would last 30 years.
It is inflation adjusted and therefore preserve your purchasing power.
So could we use this to evaluate we are ever ready to not work?
In yesterday’s New York Times article, a 35 year financial planning veteran presents some real life contrast to using the simple 4% withdrawal rate.
Read The Myth of Steady Retirement Spending, and Why Reality May Cost Less
From his observation, financial planner Neal Van Zutphen wishes to highlight the following: