David Jay wrote: ↑Wed Dec 20, 2023 3:37 pm
To retire @55: 33x expenses
To retire @60: 30x expenses
To retire @65: 25x expenses
If you can't project your expenses, you can't project your required portfolio balance.
From all the surfing, and figuring, and thinking, and applying math, this above advice seems like a very good and sound estimate.
I have 32x at 60yrs retired. Retired about 18 months now.
Of course there are other levers to apply once you retire, like how much you should spend/etc. But that gets into the approx 4% withdraw rate and a whole different discussion....
Assuming David Jay is utilizing a 100year lifespan, here are the real returns required from his assumptions:
Retire at 55 (33x expenses or ≈3% withdrawal rate) = 1.433% real return required over the remaining 45year lifespan.
Retire at 60 (30x expenses or ≈3.33% withdrawal rate) = 1.485% real return required over the remaining 40year lifespan.
Retire at 65 (25x expenses or 4% withdrawal rate) = 2.000% real return required over the remaining 35year lifespan.
Your numbers utilizing a 100year lifespan:
Retire at 60 (32x expenses or 3.125% withdrawal rate) = 1.136% real return required over the remaining 40year lifespan.
Sequence of returns matters of course. But these are all conservative assumptions.
Especially when the TIPS longterm average is currently sitting at 2.20%:
Thanks for the replies, but I still don't get it. In today's dollars, I would need $2.5M to retire (25 X $100K per year). So, in 20 years (2044), I will need $4.5M to retire due to roughly 3% per year of inflation. That is a very different target to plan for, and a target I will not likely hit.
Talk to me like a third grader...
I believe the 25x assumes some sort of average market return and inflation. Basically it’s the notion that at certain ratio, the returns from your investment is enough to support the withdrawal + inflation. Obviously if your investment is all in cash with a much lower return than we will need more money to retire.
Quite the opposite; 25x is to survive the worstcase recorded historical scenario for a 30year retirement, with a particular asset allocation.
For the vast, vast majority of 30year retirement starting years (1993 and before, since we need 30 years of records), 25x was far more than sufficient, and the retiree would have ended up with a lot more money at the end of the 30 year period. Of course, there's no way to know that at the start.
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Moniker wrote: ↑Tue Oct 29, 2024 12:52 pm
Assuming David Jay is utilizing a 100year lifespan, here are the real returns required from his assumptions:
Retire at 55 (33x expenses or ≈3% withdrawal rate) = 1.433% real return required over the remaining 45year lifespan.
Retire at 60 (30x expenses or ≈3.33% withdrawal rate) = 1.485% real return required over the remaining 40year lifespan.
Retire at 65 (25x expenses or 4% withdrawal rate) = 2.000% real return required over the remaining 35year lifespan.
Your numbers utilizing a 100year lifespan:
Retire at 60 (32x expenses or 3.125% withdrawal rate) = 1.136% real return required over the remaining 40year lifespan.
Sequence of returns matters of course. But these are all conservative assumptions.
Wouldn’t it be safer, though, to presume that you will not receive any real return on your investments during the remainder of your estimated lifespan, or even that you might get a negative return?
That way, if you do happen to receive any positive returns, you might be pleasantly surprised—and if you don’t, we’ll, you already had planned for that.
Abandon Ship! Vanguard claims the right to hold my family’s money hostage for 1 year! DM for details. 

Most experiences are better imagined.
Moniker wrote: ↑Tue Oct 29, 2024 12:52 pm
Assuming David Jay is utilizing a 100year lifespan, here are the real returns required from his assumptions:
Retire at 55 (33x expenses or ≈3% withdrawal rate) = 1.433% real return required over the remaining 45year lifespan.
Retire at 60 (30x expenses or ≈3.33% withdrawal rate) = 1.485% real return required over the remaining 40year lifespan.
Retire at 65 (25x expenses or 4% withdrawal rate) = 2.000% real return required over the remaining 35year lifespan.
Your numbers utilizing a 100year lifespan:
Retire at 60 (32x expenses or 3.125% withdrawal rate) = 1.136% real return required over the remaining 40year lifespan.
Sequence of returns matters of course. But these are all conservative assumptions.
Wouldn’t it be safer, though, to presume that you will not receive any real return on your investments during the remainder of your estimated lifespan, or even that you might get a negative return?
That way, if you do happen to receive any positive returns, you might be pleasantly surprised—and if you don’t, we’ll, you already had planned for that.
Sure, it would be safer. But the tradeoff is working longer... To accomplish your goal, x would need to equal your remaining lifespan:
Retire at 55 (45x expenses or 2.22% withdrawal rate) = 0.000% real return required over the remaining 45year lifespan.
Retire at 60 (40x expenses or 2.50% withdrawal rate) = 0.000% real return required over the remaining 40year lifespan.
Retire at 65 (35x expenses or 2.86% withdrawal rate) = 0.000% real return required over the remaining 35year lifespan.
ETA: The 4% rule of thumb, developed by Bill Bengen, amounts to 25x expenses for a 30year period. This 4% rule of thumb requires a 1.219% real return over the 30years to succeed.
Moniker wrote: ↑Tue Oct 29, 2024 12:52 pm
Assuming David Jay is utilizing a 100year lifespan, here are the real returns required from his assumptions:
Retire at 55 (33x expenses or ≈3% withdrawal rate) = 1.433% real return required over the remaining 45year lifespan.
Retire at 60 (30x expenses or ≈3.33% withdrawal rate) = 1.485% real return required over the remaining 40year lifespan.
Retire at 65 (25x expenses or 4% withdrawal rate) = 2.000% real return required over the remaining 35year lifespan.
Your numbers utilizing a 100year lifespan:
Retire at 60 (32x expenses or 3.125% withdrawal rate) = 1.136% real return required over the remaining 40year lifespan.
Sequence of returns matters of course. But these are all conservative assumptions.
Wouldn’t it be safer, though, to presume that you will not receive any real return on your investments during the remainder of your estimated lifespan, or even that you might get a negative return?
That way, if you do happen to receive any positive returns, you might be pleasantly surprised—and if you don’t, we’ll, you already had planned for that.
Why invest in anything if you don’t get a return on your investments? Expecting 0 over long term makes no sense. We are investing in businesses. Do we really expect all these business to have $0 profit over decades? They would all fail which would mean the end of our economy and way of living. Expecting 0 return can only happen in a mad max post apocalyptic world.
Wouldn’t it be safer, though, to presume that you will not receive any real return on your investments during the remainder of your estimated lifespan, or even that you might get a negative return?
That way, if you do happen to receive any positive returns, you might be pleasantly surprised—and if you don’t, we’ll, you already had planned for that.
Why invest in anything if you don’t get a return on your investments? Expecting 0 over long term makes no sense. We are investing in businesses. Do we really expect all these business to have $0 profit over decades? They would all fail which would mean the end of our economy and way of living. Expecting 0 return can only happen in a mad max post apocalyptic world.
Sure, but for a retiree, what is “long term”? And will the retiree’s life match that “long term” time period?
It seems to me that a span of flat or negative returns is about as likely as a span of positive returns over any five to ten year period, which for more than a few retirees, is all that they may live upon retiring at 65 or so.
Abandon Ship! Vanguard claims the right to hold my family’s money hostage for 1 year! DM for details. 

Most experiences are better imagined.
Why invest in anything if you don’t get a return on your investments? Expecting 0 over long term makes no sense. We are investing in businesses. Do we really expect all these business to have $0 profit over decades? They would all fail which would mean the end of our economy and way of living. Expecting 0 return can only happen in a mad max post apocalyptic world.
Sure, but for a retiree, what is “long term”? And will the retiree’s life match that “long term” time period?
It seems to me that a span of flat or negative returns is about as likely as a span of positive returns over any five to ten year period, which for more than a few retirees, is all that they may live upon retiring at 65 or so.
If one is to die within 510 years, well then, returns don't really matter much do they?
Again, if one is expecting flat or negative returns over long term in equities and bonds, they are in the wrong investment.
The challenge I’ve been thinking about, is how life changing events can completely pivot my/our thinking.
Once around 2025X + SS, I think it’s good enough. Especially when X is 50% or more discretionary spend.
There seems more probability that I or my family will have less quality/healthy years than the 40+ years we ‘have’ to plan for.
It seems I/we are usually optimizing for the 20% case (must have plan A, B C for 40+ years), while somewhat ignoring the 80% (more likely case of not all living healthy for 40+ years in retirement).
Anyway, that’s just how I’ve been thinking.
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