- This person likely could have drawn social security income, given that it's 2000 and SSI is not bankrupt.
- Ideally you have the funds you need to retire in the principal alone, and are only relying on very modest growth rate to fight inflation once you're actually withdrawing from it.
- You shouldn't be withdrawing retirement funds from an S&P 500 index fund investment. The funds should have been in a retirement income-focused fund or low-risk bonds, which would have helped maintain principal even in down years.
- Ideally your house is paid off, so you're not paying down a mortgage, and have significant equity in your home to draw from as a last resort.
I think a more realistic scenario is someone in their mid-50s who thought the numbers were working out in their favor to retire early, only for the market to crash, and now that is no longer looking like an option.
I'm not addressing strategy, just the math to show sequence of returns does impact withdrawals.
Also, while I agree with you position, most people unfortunately are not in that kind of situation (of course, they typically don't have the $1M I used in my example either).
- This person likely could have drawn social security income, given that it's 2000 and SSI is not bankrupt.
- Ideally you have the funds you need to retire in the principal alone, and are only relying on very modest growth rate to fight inflation once you're actually withdrawing from it.
- You shouldn't be withdrawing retirement funds from an S&P 500 index fund investment. The funds should have been in a retirement income-focused fund or low-risk bonds, which would have helped maintain principal even in down years.
- Ideally your house is paid off, so you're not paying down a mortgage, and have significant equity in your home to draw from as a last resort.
I think a more realistic scenario is someone in their mid-50s who thought the numbers were working out in their favor to retire early, only for the market to crash, and now that is no longer looking like an option.