Comments on: The End of Wage Slavery http://www.iplanretirement.com/retirementblog/end-wage-slavery/ Learn How To Retire Early Mon, 30 Jan 2012 04:44:05 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: TJ http://www.iplanretirement.com/retirementblog/end-wage-slavery/#comment-5368 TJ Wed, 20 Jul 2011 21:57:48 +0000 http://www.iplanretirement.com/retirementblog/end-wage-slavery/#comment-5368 I think it's very easy to calculate your retirement needs. The historical safe withdrawal rate (SWR) from a retirement nest egg is 3% (if young) and 4% if old. Meaning, if you simply invest in index funds and pull out 3% of your money each year, you will never run out of money and will likely finish with more than you started with. For example, if you have $500K then you can spend 3% of that ($15K) per year. If you need more than that, then you need to keep working. If you are older, in which case you can afford to slowly take you capital down, then you can use 4%. In that case, you would need to spend $20K or less. I think it’s very easy to calculate your retirement needs. The historical safe withdrawal rate (SWR) from a retirement nest egg is 3% (if young) and 4% if old. Meaning, if you simply invest in index funds and pull out 3% of your money each year, you will never run out of money and will likely finish with more than you started with.

For example, if you have $500K then you can spend 3% of that ($15K) per year. If you need more than that, then you need to keep working.

If you are older, in which case you can afford to slowly take you capital down, then you can use 4%. In that case, you would need to spend $20K or less.

]]>