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johnrrafferty

7,6,5,4,3..0

No, this isn't a countdown to SpaceX or Blue Origin or Virgin Galactic (insert your billionaire space exploration hobby firm name here) launch.


Rather, this is a juxtaposition of numbers to tell a good news/bad news story for would-be retirees who have no pension waiting for them.


7: Many of these folks have seven figure portfolios - I'm talking mostly here about folks with up to $5 million in investable assets.


6: These same people, who are in the final stages of nest feathering during their late stage careers, are solid six figure earners and have been for some time. They are used to a lifestyle funded by that six figure paycheck. I'm not talking about $101,000 here. I'm talking $175,000, $250,000, $400,000 a year lifestyles.


5: The math of converting those seven figure accumulated assets to sustainable income using convention withdrawal methods will in many cases result in five figure retirement incomes, not counting Social Security.


4/3: To wit, a $2 million retirement nest egg nets $80,000 at a 4% withdrawal rate, and only $60,000 at a more conservative (and au courant) 3% rate of withdrawal. And since it is assumed that most retirees will not dedicate their entire accumulated assets to the production of retirement income, even someone with say $5 million in assets will find it challenging to produce a six figure income that is both sustainable and doesn't use all $5 million to do so.



0: and thanks to no pension - 0- zilch- the onus of retirement income production rests squarely on the shoulders of the would be retiree.



With a bit of advance planning, there are solutions for creating a six figure sustainable retirement cash flow that are more efficient, requiring less capital commitment today, than conventional accumulate/hope/withdraw/hope methods.





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