"No connection whatsoever between the SWR and the real rate of return"

Submitted by Schroeder on Wed, 2007-11-28 21:40.

General Hocomania

No connection? That's what hocus says. LINK

Quote:

I think it's reasonable to believe that one's overall stash can grow by about 4 percent real per year plus any additions to saving. This is a very rough rule of thumb. People should be working their own numbers and coming up with more customized rules of thumb.

I am inclined today to suggest a higher number for those using the Valuation-Informed Indexing approach. I think that a Multiply-by-20 rule would work for a good number of aspiring early retirees. In general, though, it is better to underestimate your earnings than to overestimate them.

There is of course no connection whatsoever between the SWR and the real rate of return earned on all of your holdings. The idea that the two are the same thing is Goon Talk.