LogFAQs > #932206063

blu posted...

10% is what you can expect. 12% is a myth. That 10% comes 7% real after inflation. That 7% become a 4% withdrawal rate factoring in the downs of the stock market. But basically it lets you live on 40k a year (and then 15% tax on that), and if you live on less then it'll grow.

Oh, that also assumes you aren't taxed on the million. If you're taxed you're getting closer to 650k, meaning 4% withdrawal is a bit under 30k safe withdrawal rate.

True if you get taxed on the mill that would certainly mess things up. If you did get 40k though it's only about 8% interest on that (first 12k is not taxed, next 10k is only 10% and the rest is at 12%.

That averages out to 12% of 20k and 10% of 10k or $3400 out of $4000 (pretty close to 8%).

Meanwhile factoring in inflation etc, really doesn't make a difference in how much money you actually are gaining per year, it's just that money won't go as far (but it's still equivalent to a similar income).

You can actually get about 7% with a variety of fairly secure/safe bonds btw, which is more secure then using the stock market. While not quite as much, on 1 mill that is still 70k a year (forget inflation, it affects everything). This does mean paying significant taxes mind you, but it's the equivalent of having a 70k a year job basically (doesn't really matter where the money comes from).

In such a case sadly you'll end up paying significant taxes 0% on the first 12, 10% on the next 10, 12% on the next 30 and 22% on the last 20. That ends up being, about 8.5k in taxes total.

That still leaves you a good 62k a year to live on though (as long as your primary residence is in a state with no income taxes).

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