Author Topic: Fully funding regular old retirement is a major milestone!  (Read 14704 times)

Bertram

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Re: Fully funding regular old retirement is a major milestone!
« Reply #50 on: November 11, 2015, 01:11:46 PM »
I was always under the assumption of the opposite.  7% returns which you then have to adjust for inflation, giving 4%, which is why the generally-accepted SWR is 4%.
Nope.  It's 7% real returns.  MMM isn't exactly an authority, but when in Rome, quote the Romans.

http://www.mrmoneymustache.com/2011/06/06/dude-wheres-my-7-investment-return/
Quote
On average, if the stock market continues its historical performance, your investments will return close to 7% per year even after keeping up with inflation.

This is great news! I can't remember where I got the idea that it might be 4% real returns. But your discussions and the link has helped and really brightened my mood, too! It means I am further along than I thought I was. : )


pirate_wench

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Re: Fully funding regular old retirement is a major milestone!
« Reply #51 on: November 11, 2015, 03:08:57 PM »
I've been thinking about this very thing, only in terms of trying to decide if I should just start pouring money into my mortgage and stop saving as much for retirement. With the small extra payments we are making into the mortgage right now, it should be payed off in about 15 years.  I am 34 with $300,000 in retirement savings. Running the numbers different ways, it seems like I'm at about equilibrium where if I don't add another dime to my savings, assuming a 7% ROT, I should have enough to retire about when I pay off my mortgage... assuming 5%, then 5 years after I pay off the mortgage. I keep running different scenarios trying to decide on how to rebalance my savings/pay down rate, or trying to decide if I should just stop all savings and drastically cut back on work instead, entering semi retirement now :)   Either way, I am celebrating the same victory, being at a point where I could scale back to a subsistence wage and still have a comfortable retirement at a "normal" retirement age, likelier much earlier. It is pretty damn exciting! Congrats.