Comment on Top 10% of Americans Have Double Wealth of The Bottom 90%
rayyy@piefed.social 1 day agoa net worth of $2,000,000 would provide a retiree a mostly-safe withdrawal rate (4% or $80,000) of around the median income of ~$84,000.
If inflation and dollar devaluation eats away faster than investment growth they may find themselves just scraping by.
tburkhol@lemmy.world 1 day ago
The ‘mostly safe 4% rule’ actually includes inflation. It’s based on the assumption that assets are invested in a mix of broad stock market and treasury bonds, and allows the retireee to increase their annual spending by inflation, It usually results in the retiree dying with substantially more wealth (inflation adjusted) than they started out with. The stock market is a natural inflation hedge and, in this day of multinational conglomerates, a currency hedge.
Ava@piefed.blahaj.zone 20 hours ago
For those curious as to additional reading, the origin of the 4% rule comes from the Trinity Study, a finance research project from the late 90s.
Not to be confused with the Trinity Test, which occurred in the 40s and had very little to do with finance.