241 | Do We Really Need That Much?

If you’ve accumulated 25 years of spending when you stop working, loads of research says you can increase your spending by inflation every year until you die and you won’t run out of money.

You won’t run out and there’s a great chance you’ll die with more than you had at the start.

We don’t use jargon around here, but if we did, you’d hear this research called the 4% rule.

But it begs the questions…

How many years would be needed if you continued generating some amount of income from something you loved to do?

Or if you were agile enough with spending to delay a big ticket item by a year or two while your investments were down?

Or if you had a good cash cushion and saving spread across account types so you could manage taxes wisely?

Or if you didn’t watch your investments and eliminated the chance of panicking at the wrong time?

It’s less than 25. A whole lot less.

Additional Perspectives

The Extraordinary Upside Potential Of Sequence Of Return Risk In Retirement by Michael Kitces