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RR Valley, ND; MN native | I've heard of this but not looked it up:
"the 4% rule is a retirement planning guideline suggesting you can withdraw 4% of your portfolio in the first year, then adjust that amount for inflation annually, to make savings last 30 years. "
Example:
- How it Works: On a $1 million portfolio, you withdraw $40,000 in year one. If inflation is 3% in year two, you withdraw $41,200 ($40,000 + 3%).
- Goal: Provides a steady income stream while significantly reducing the risk of depleting your savings over a 30-year period.
There is no reason you could not do the same at age 40 (or any age). Reading this, you are just skimming the interest off the principle every year w/o dipping into said principle. Could do that indefinitely I would think. The principle never grows though and if inflation averages >3% for long periods of time then the buying power is reduced. | |
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Rule of ???? (2%, 3% ??) for a 40 Year Old.
