I don’t understand why every time the idea dominates of withdrawing 4% of the income in retirement to live comfortably. The question is - WHEN are you going to use the PRINCIPAL of the money that bring you those 4% in return? Maybe when you are 100!? Or, the principal will go to the advisors and banks after you die!? That 4% rule is so UNREASONABLE that I can’t imagine someone well educated falling for it!
The 4% and x25 rules don't take CCP and OAS in to account. I'm retiring at 59 and don't have $1M, for the first 6 years I'll draw $45000/y from my investment but at 65 that will drop to only $25000/y as my CCP/OAS will give me an additional $22,000/y.
The problem is the current stock market. We may very well have next 3 to 5 years with negative or marginal returns. So, what do we do? Move our funds to CDs or take risk and stay in equities?
Hight Interest Savings and GICs are attractive for shorter term objectives however net of tax this is a negative real return outlook. For longer term investments, there are select areas within global markets where we continue to see opportunity. It is key at this point to have a focus on value and cash flow focused investments and not owning the market as a whole.
You continue to invest because the market is on sale. You continue to work. You spend less. Stay on a budget. Over the long term, the market will go up.
Very clearly explained, surprised it's not viral yet.
I don’t understand why every time the idea dominates of withdrawing 4% of the income in retirement to live comfortably. The question is - WHEN are you going to use the PRINCIPAL of the money that bring you those 4% in return? Maybe when you are 100!? Or, the principal will go to the advisors and banks after you die!? That 4% rule is so UNREASONABLE that I can’t imagine someone well educated falling for it!
Thank you so much for the great info!
Based on your 4% rules, what is the safest investment for retiree to earn at least 4% return now ?
The 4% and x25 rules don't take CCP and OAS in to account. I'm retiring at 59 and don't have $1M, for the first 6 years I'll draw $45000/y from my investment but at 65 that will drop to only $25000/y as my CCP/OAS will give me an additional $22,000/y.
The problem is the current stock market. We may very well have next 3 to 5 years with negative or marginal returns. So, what do we do? Move our funds to CDs or take risk and stay in equities?
Hight Interest Savings and GICs are attractive for shorter term objectives however net of tax this is a negative real return outlook. For longer term investments, there are select areas within global markets where we continue to see opportunity. It is key at this point to have a focus on value and cash flow focused investments and not owning the market as a whole.
You continue to invest because the market is on sale. You continue to work. You spend less. Stay on a budget. Over the long term, the market will go up.
Most people live paycheck to paycheck. Not many have $1 million just sitting around a bank. I'm a licenced Plumber and have nowhere near a million.
So clearly explained.... Thank you
Very crisp explanation. Thank you!!