Author Topic: 25 times expenses?  (Read 1630 times)

MakeDemDollars

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25 times expenses?
« on: March 09, 2017, 10:24:33 PM »
I've read that in order to retire you need 25 times your yearly expenses invested/saved.

I'm not sure I quite understand the math (not my best subject).

So during these 25 years, where are you pulling money from? I'm assuming dividend payouts, maybe interest?

Dividends I would understand if you were at a 4-5% yield but it seems most here are into index funds which seem to pay around 2% or so. At this time anyways.

What happens when the 25 years runs out and if you're making a 2% yield?



MakeDemDollars

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Re: 25 times expenses?
« Reply #2 on: March 09, 2017, 10:54:38 PM »
Thank you.


Metric Mouse

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Re: 25 times expenses?
« Reply #3 on: March 11, 2017, 04:59:13 AM »
I'll say it again - MDM is my forum hero. Always helpful, always positive, always a genuine addition to discussion. Thank you.

GreatLaker

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Re: 25 times expenses?
« Reply #4 on: March 11, 2017, 07:16:34 AM »
Here is another Bogleheads page describing various withdrawal methods and the advantages and disadvantages of each. You noted a potential problem with outliving your money if there are sustained periods of low returns during retirement, especially if you withdraw a fixed inflation adjusted amount each year. Some of the other methods described in the following page are more dynamic and are better able to handle changing market returns.

https://www.bogleheads.org/wiki/Withdrawal_methods