Imagine you had a crystal ball that could tell you your financial future. A magical orb that knew all your spending and investment returns over the next several decades. With such a device, we could perfectly plan out when you could retire to match your spending needs with your retirement income over time.
Unfortunately, no such object exists. While we might be able to estimate your future spending based on your expected lifestyle in retirement, we have no idea what investment returns you will get nor how long you will live.
This is why the Nobel Laureate William Sharpe called retirement the “nastiest, hardest problem in finance.”If it were easy, there wouldn’t be an entire industry dedicated to helping people navigate this period of their lives.
Despite the difficulty of the problem, there are some simple rules you can use to determine when you can retire. One of the simplest is called The 4% Rule.
The 4% Rule
William Bengen was trying to figure out how much money retirees could withdraw from their portfolios each year without running out of money. In 1994 he published research that would revolutionize the financial planning world.
Bengen found that retirees throughout history could have withdrawn 4% of a 50/50 (stock/bond) portfolio annually for at least 30 years without running out of money. This was true despite the fact that the withdrawal amount grew by 3% each year to keep up with inflation.
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Denne historien er fra June 2022-utgaven av Storizen.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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Firefly Gifting Lanterns...
A bilingual poet-writer(Tamil, English), Madhumathi. H is an ardent lover of Nature, Poetry, Photography, Music.
SOJOURNER IN THE UNDERWORLD
In her own words, Dr. Pallavi Dongare is a Consultant Pediatrician by profession - I consider myself an accidental poet or writer which still I am unsure about!
LET IT GO TO BEGIN A NEW CHAPTER
Sucharita is the author of three books, \"Estrenar: The Beginning Of A New journey\", \"Merak\", and \"Ayanam: The Incredible Path\". Estrenar and Merak are books filled with poems, whereas Ayanam is about day-to-day quotes. She has co-authored ten anthologies to date. Her debut book, Estrenar, has been translated into five foreign languages so far. Renowned poets like Dr Jayanta Mahapatra and Dr Sitakant Mahapatra have praised her poems and poetry books. Sucharita Parija has a bachelor's degree in architecture and a master's in computer science. In her words, she is the sole motivator in her life.
INTERVIEW Ashdin Doctor Author: Small Actions, Big Results
In this insightful conversation with Ashdin Doctor, author of Small Actions, Big Results, we explore the transformative power of habits and mindfulness. From practical strategies for weaving mindfulness into the busiest of schedules to the philosophy of steady, small actions driving profound changes, Ashdin shares how anyone can create lasting transformation.
As you turn the page, let the adventure begin - our book reviews await, promising literary delights and captivating tales!
A Dog's Diwali by Chitrangada - Ready to dive into an adorable Diwali adventure that will make your heart skip a beat? Buckle up, because we're talking about \"A Dog's Diwali,\" a story that's as sparkling as Diwali fireworks and heartwarming as a cozy blanket on a chilly night!
A CHRISTMAS PROMISE
A deathly silence pervaded the chilling air of Cascade Town, once vibrant now stands solemn as a stoic reminder of the fallacy of permanence.
A Year Full of Pain
As the New Year bell rang, we geared up to welcome 2024. A fresh year was ahead of me and I was excited to welcome 2024 just like others. With the excitement in me, I was not aware of what 2024 had in store for me.
Through Reflection's Nurturing Lens
Anil buzzed the doorbell repeatedly, while his feet tapped the ground to the rhythm of a jolly song he kept crooning. Resembling a tiny bird that made abrupt, sharp movements with antsy eyes, he rehearsed how he'd break the news of his promotion to his wife, Sujata-a raise that was well-earned, an outcome of several fair-unfair competitions.
Preeti Shenoy Revisits Alka's Heart with her latest, "The Homecoming"
In this insightful interview, author Preeti Shenoy takes us deeper into the world of Alka, the complex and compelling protagonist from her previous novel A Place Called Home, with the release of its sequel, The Homecoming.
Meditations for Mortals by Oliver Burkeman
It's all too simple to find your wallet much lighter in the name of \"wellbeing\" in the self-care field. Ads for crystal-infused water bottles, miracle powders, designer exercises, and a collection of self-help books you didn't even realize you needed start to appear as soon as you sign up for a meditation class.
