So let's do the math then, OP uses 2.5% (Assets ~6Mil USD)for a few years until he figures out some side hustle he is passionate about (because he is financially secure at this point.)... 150K/yr...delamer wrote: ↑Mon Jun 11, 2018 10:18 amThe OP is only 30 years old. Hopefully he’ll live another 50 to 60 years.kaeltor wrote: ↑Mon Jun 11, 2018 10:03 amFoolMeOnce wrote: ↑Sun Jun 10, 2018 9:57 pmERE's wiki notes that a 4% safe withdrawal rate is only for 30 years, and goes in to suggest that this is overly aggressive in light of newer research.kaeltor wrote: ↑Sun Jun 10, 2018 1:24 pmYou can always decrease how much you withdraw with market fluctuations. It depends on market performance. There's been follow up studies to the Trinity study and they are putting the number between 3-4% still...FoolMeOnce wrote: ↑Sat Jun 09, 2018 9:56 pm
Because after 30 years, there might be $10 left. That is considered a success in the Trinity study, the basis for the 4% rule if I'm not mistaken. You said to expect the original $6m to grow while withdrawing 4%. That is not a reasonable or evidence-backed expectation. With a horizon of more than 30 years, it gets riskier to withdraw 4% per year.
Furthermore if you FI/RE early on you can still find other ways to make money by pursuing productive hobbies etc...
Check out http://earlyretirementextreme.com/, that's where most of my ideas of FI/RE came from
https://wiki.earlyretirementextreme.com ... rawal_rate
Further, these SWRs are about the chance of total depeletion of funds; they are not withdrawal rates at which one should expect their starting balance to increase, let alone have that guaranteed, as you wrote (though it might well increase). OP does not seem like someone who will suddenly spend 4% per year of this large inheritance, but I just wanted to correct misadvice.
Ok, so what can one do? Assuming you have the funds to retire early, and the 4% rule doesn't work like you mentioned... is there no hope of retiring early? (In Op's case for example)
For his portfolio to have a survival probability comparable to that for a 30 year portfolio withdrawn at 4%, he needs to lower his withdrawal rate to 2%/2.5%.
The longer your portfolio needs to support you, the lower your withdrawal rate should be.
That was my point to the OP, just live off the investments for a few years until he can figure out something he can dedicate himself to and will increase his cash flow. Even @ 2.5% that's still a lot of money that he can pull.