![]() However, if you retire at the age of 40 or 45, your retirement journey is a lot longer. But then, some of the variables might not pan out now, like the fact that the 4% rule was built to work reliably for 30 years. Now, the focus and calculations were done in the 1990s by using numerous assumptions that are very specific to the United States.įor instance, the 4% rule was built on the assumption that your investment portfolio would grow at an average of 7% per year. ![]() It is the corpus you must have before you retire. Thus, your retirement corpus needs to be 25 times the amount you withdraw in the first year.įor instance, say you need Rs.10 lakhs for expenses in the first year of retirement. Another way of doing this is to reverse the rule. 5 crores, as per the 4% rule, you can use up to Rs. Now, what’s the 4% rule? If you retire with a kitty of, say, Rs. A helpful and often used rule of thumb around this is the 4% rule. To answer how much income you need to sustain your lifestyle in early retirement, you need to find out how much you can spend on a monthly or yearly basis. The second question is probably the easier one. One, how much income do you need to sustain your lifestyle in early retirement? Two, how soon do you want to retire? You can do it by asking two basic questions. Now, before we get into each of these in greater detail, it’s important for a F.I.R.E enthusiast to first establish the math. These are the three bedrock principles of any F.I.R.E strategy. Save more, spend less, and invest wisely.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |