Thread: Retirement scenario...what do you think?

Not trying to be a wise guy but why is 450K the worst case scenario. If you are in the stock funds, 0 is the worst case scenario.

It's a good question though. I am eligible in 7 years. I was hoping to have closer to a million by then. I need about 11% a year. Not looking too good for this year.

Dave

Wheels wrote:

I need about 11% a year. Not looking too good for this year.

That reminds me. I read about this this in Warren Buffett's annual report... We know the S&P 500 has averaged11.2% annually but if you look for years with returnsbetween 8% and 14% – you will find only onebefore 2004. In other words, last year's “normal� return of 10.8% was anything but normal.

A strongly supported consensus is that a safe withdrawal rate is 4%, annually adjusted for inflation. This is the central focus at retireearlyhomepage.com . This assumes (I believe) that you leave a good portion of it in stocks as well (75%??), but annually rebalance it. So $450,000 could safely provide 18K per year, adjusted for inflation annually without significant risk to losing principle.

That's not a lot, so i'm assuming you would have additional monies from both the pension and SS to suppliment it. If all 3 of those added up together is enough, then go for it!

Seriously check out that page i linked above. Those guys are experts there on safe withdrawal rates (SWR).


(edit) One thing i forgot is TSP money hasn't been taxed yet. I think you'd have to make adjustments in your calculation to account for an "after-tax" basis. So you're probably looking at more like only 13-14K a year max provided by a 450K dollar TSP.