Thats not the way to interpret what he wrote. He used the example of $100k annual expenses for ease of computation.
But if you do happen to spend $100k pa, then you could use his estimation to know how much you would need to retire and for how many years. If you spend less or higher you can then scale up or down.
I can assure from my own experience that if you have $1m right now, you will not be investing that $1m fully to derive $40k pa (or 4% returns). Why?
You will need to have a home, say maybe a cheap 2 rm
HDB, that would suck up $250k. Then you would set aside $50k as emergency fund maybe in FD earning 1% or lower. Leaving you with $700k, and you would want to spread the risk a bit by diversifying your investment with some safer but lower return investment. End up you will not be getting 4% returns from your $1m.
So think through carefully. Dont rush blindly into retirement and get caught with money running out before you turn 65!
Quote:
Originally Posted by Unregistered
Using your examples here, not many can retire.
You don't need $100k pa in the first place.
You just need $50k pa in today's dollars to retire. If you invest in a 4% dividend yield stock, you just need $1.25m worth of stocks. Inflation will be taken care of by the rising dividends in line with inflation.
I suggest you learn about investments and please don't advise people if you're not qualified. Thank you.
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