So just how much is enough? And when can I retire peacefully? Two questions any working individual will be asking themselves. And yes, there are theories and many financial planners that can structure a specific plan.
We all know there’s no hard and fast rule but one that is used is the 4% rule. The Stealthy Wealth blog (writer prefers to remain anonymous) unpacks this in further detail below. Some interesting conclusions, let us know if it worked for you. – Stuart Lowman
A magic formula for retirement – does it exist? It does, and it is known as the 4% rule.
This ingenious little rule takes out all the complications of retirement planning, and allows you to figure out exactly how much you need to safely retire. It also allows you to determine how much you can withdraw from your retirement savings each year without having to worry about running out of money. And it makes provision for inflation.
Let's investigate some more.
A lot of information on the 4% rule for retirement is available on the internet, and a number of articles and blogs have been written about it both internationally and locally (Google is your friend). I first came across this concept on Mr Money Mustache’s blog, and it literally changed my life1.