“the market” returns “8% on average over time” why is the withdrawl rate to make my retirement last 30 years only 4% ? Seems like it should last forever at 4%
In: Mathematics
Because 8% is an average return with pretty aggressive investments like stocks/ETFs. When you are in retirement you want to have less risky investments since you don’t want your retirement portfolio to lose 20% in value like the S&P500 did a couple years ago. So in retirement a lot of your portfolio should be in less risky bonds.
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