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August 26, 2008


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This is embarrassing, but can you help me tweak my math to ensure that I’m not missing something glaringly important? In my calculation, a portfolio with growth = 6%, inflation = 3.5%, and withdrawal rate = 3% (increased per year at the inflationary rate), would be depleted in year 30. If the growth = 8.5%, then the portfolio would be depleted near year 50. Please note that this was a straight calculation that didn’t include potential offsets (i.e. social security, mortgage pay-off, laddered short-term investments).

Now that you’re nearing 6 months in retirement, what does a typical day look like?

Retired Syd

@J: Let me play around with your numbers and I will email you a spreadsheet.

As to a typical day, he longer I'm retired, the less the days are "typical." Especially right now, I've been working on another house painting project so all other routines have been put on hold--including working out and blogging! All that's going on in politics has got me addicted to news right now too, which is not that typical but a big time suck for me. Oh well, that will end in a couple months.


Wow, thanks so much! Also, maybe you'll post before and after pictures once the painting project is completed? These are definitely exciting times in politics and the world economy! Have a great weekend.

Early Retirement Extreme

Yeah, I'm wondering whether I should also start hammering on that point. There are far too many "Save (small) amount monthly and through the 'magic' of compound interest you'll have a million in 30 years" (I really wish my fellow pf bloggers would stop these kinds of posts) ... of course at which point that million will be worth .. much less thanks to the magic of inflation.

All these numbers are always in todays money. Always.

Retired Syd

@ERE: That's exactly right, the "magic of compound interest" is indeed magic, but inflation is kind of like black magic!

Retired Syd

@J: I emailed you some numbers--were you able to open the spreadsheet? Shoot me an email if you didn't get it and I'll send it again.


Thanks so much for visiting my blog and commenting! I'm glad to find your site, also. You present good information here. I've been obsessed with figuring out the "how much is needed in retirement" question for years, and spent a lot of time trying to answer it for myself before I retired. I think it is really important to remain flexible, too, in terms of spending and possibly finding some part-time income.

I'm going to add you to my list of Links.


Re: inflation and the "Magic" of compound interest, thought that this humorous quote is apropos:

"$100 placed at 7 percent interest compounded quarterly for 200 years will increase to more than $100,000,000 - by which time it will be worth nothing." - Robert A. Heinlein

Dr. Art Waltz

I am "officially" retired as of 1/1/11 after 35 years in education. I am in my mid 60's and am simply looking forward to enjoying more of what I took for granted for sooo many years. My wife is 55 and loves teaching the first graders so I am fine with her working as long as she enjoys her job. In the meantime I am setting out on another journey of writing the next chapter in my life and my mantra about retirement is not about spending but about saving. I don't need to spend crazy anymore to keep up the airs just keep busy with doing things that make me happy and can help other people. Does this sound like a good plan??

Retired Syd

@Dr. Art: Congratulations and a Happy New Year to you! Sounds like an excellent plan to me! Enjoy.


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