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The 4% number came from an older study. The presumption was that some years you do well, some poorly. But on average, drawing 4% of the current balance should not deplete your assets unless you're living 30+ years in retirement. A more modern study, using similar presumptions, and done after 2008, claims that 2.5% is the new "safe" draw down rate. If you get too many years like 2008, where you lose 50% of your portfolio in a single year then there is no amount you can possibly save that last you until your death (unless you have 8 digits saved up). No Wave posted:One hack I'm still looking into - if you have money in an IRA or 401(k), it seems like you can transfer a little of your money every year into its respective Roth counterpart. This is loving phenomenal for years of low income, ie, most of your years post-financial independence. Just transfer about 25k a year from standard to Roth when your income is zero, pay very little tax, and it'll all be tax-free when you start withdrawing it after age 59.5. This is because money taken from a 401(k) isn't technically "investment" income, and is taxed like normal income, and it's much better to spread out your standard income over a long period (done by the gradual conversion). I work in the industry and this 401k thing you're describing may or may not be allowed by your plan. It is a lot of paperwork for the plan sponsor and they're not likely to do it at all. You probably should be rolling your 401k into your IRA when you leave a company (this depends on the vesting of the company match). Recharacterizing your traditional IRA into a Roth IRA means that you treat it as income in the year you recharacterize it. This is why you do it during your low income years.
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Jul 23, 2013 05:34
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| # ¿ May 2, 2024 10:19 |
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tuyop posted:US Inflation is like 1.8-2% this year, dude. You need to take some more risks! http://www.shadowstats.com/alternate_data/inflation-charts One example of a deleted stat is Producer Price Index for Heavy Construction. An elected office I ran for was in charge of a massive transportation construction project. The cost overruns (more than 100% over budget) were due to very high inflation in project essentials such as concrete, steel and copper.
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Aug 3, 2013 03:34
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