It assumes our stock/bond portfolio will yield 2% every year and it assumes that our expenses (all in including taxes) will grow at 2% a year due to inflation. According to the spreadsheet, a $2 million portfolio with starting expenses of $120,000 per year will run out in about 17 years.
Prudence wrote:According to the spreadsheet, a $2 million portfolio with starting expenses of $120,000 per year will run out in about 17 years. (This excludes everything else including social security, pension etc.)
1. Is this about right?
2. What is a better way to do this?
jsl11 wrote:Preparing a 30 year retirement projection is a good thing to do. It gives you some idea of how things will work out, and lets you know if you need to revise your expectations. However, in my experience, it is a mistake to rely on your projections. I have a spreadsheet that I prepared in 2001 to project my finances during a retirement that began in 2005. When I look at that spreadsheet now, I find that all of my projections were wrong, some on the plus side, and some on the minus side. Strangely, the pluses and minuses have canceled each other out, and so far, my projection has turned out to be accurate. However, much of this is just good luck. So, I would recommend that you continue to make your projections as best you can. But be aware that much will change going forward and there is no way you can actually forecast what will happen.
Prudence wrote:Inflation - how to treat in retirement projection?
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