How much of your investment portfolio can you withdraw each year in retirement?
Thirty-two years ago, the Kaderlis sold everything they owned, including their home and restaurant. They put all of their proceeds ($500,000 USD) into an S&P 500 index fund and decided to retire in Mexico.
For years, their portfolio was their only source of income.
What would have happened if they had consistently withdrawn an inflation-adjusted 4 percent annually from their initial $500,000 portfolio?
And should the 4 percent rule be more of a guideline than a rule? If so, how do we deal with that? Should it be 3% or 1.8%? The best answer is, "None of the above."
In this article, I answer the above question, and then I extend it.
Click to read the rest of my article at AES International