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How large of a portfolio is needed to spend $200k annually indefinitely?
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Date: July 7th, 2025 3:03 PM Author: Provocative sepia nursing home (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079518) |
Date: July 7th, 2025 3:04 PM Author: Topaz Vivacious Striped Hyena 10mm (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079524) |
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Date: July 7th, 2025 3:09 PM Author: alcoholic tan toaster fuck my ass. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079549) |
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Date: July 7th, 2025 3:10 PM Author: Provocative sepia nursing home This seems about right. $10 million yields $300k pretax annually under the 3% rule, and assume 1/3 tax rate (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079556) |
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Date: July 7th, 2025 3:10 PM Author: electric prole site There is no 3% rule. No one needs to be that conservative. There is no version of the Trinity Study which supports this. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079558) |
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Date: July 7th, 2025 3:12 PM Author: Topaz Vivacious Striped Hyena its not even that conservative dude. inflation, fees, fines, taxes, etc gobble up all of your supposed "earnings". the economy isnt really growing faster than that. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079572) |
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Date: July 7th, 2025 3:15 PM Author: Provocative sepia nursing home To my mind, 3% is aggressive going forward and a 2.5% or even 2% rule is probably more appropriate (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079584) |
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Date: July 7th, 2025 4:07 PM Author: alcoholic galvanic volcanic crater 3% cagr means you could live 45 years with $5M on $200K spend and not run out of $. If you can get 5% then you can do $4.2M and never have your balance drop.
edit: factor 2% inflation to the $200K spend - you'd run out of $ in 45 years with $5M
edit v2: I guess if you pay 25% taxes you'd run out of $ in 30 years vs. 44 and change, assuming you pay taxes on the $ you withdraw/spend |
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Date: July 7th, 2025 5:30 PM Author: fantasy-prone theater stage you are retarded if you pay an effective tax rate of 33% on 300k in investment income. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49080104) |
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Date: July 7th, 2025 6:20 PM Author: Provocative sepia nursing home Paying taxes is the law (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49080286) |
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Date: July 8th, 2025 6:02 AM Author: fantasy-prone theater stage Even if you are single, do no tax planning and have no deductions whatsoever, and every penny of income is STCG or dividends, the effective tax rate is still less than 25%. Additional medicare tax and NIIT pushes it to a bit over 26%. Even in the basic worst case scenario you don't pay 33%. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49081696) |
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Date: July 8th, 2025 11:01 AM Author: Provocative sepia nursing home You're forgetting state taxes 😵💫 (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49082266) |
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Date: July 7th, 2025 3:07 PM Author: Chest-beating sapphire athletic conference church $6m (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079539) |
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Date: July 7th, 2025 3:08 PM Author: Crystalline narrow-minded abode $200k is this supposed to be some kind of a trick question (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079545) |
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Date: July 7th, 2025 3:11 PM Author: insanely creepy dun telephone (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079562) |
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Date: July 7th, 2025 3:44 PM Author: unhinged principal's office (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079697) |
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Date: July 7th, 2025 4:39 PM Author: Swashbuckling lay affirmative action (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079950) |
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Date: July 7th, 2025 3:11 PM Author: electric prole site Between $4m-$5m depending on how conservative/aggressive you want to be. That's to get $200k pre-tax (increasing annually for inflation); you'd need to adjust upward if you want a post-tax figure. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079563) |
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Date: July 7th, 2025 3:15 PM Author: Provocative sepia nursing home I said spend, so obviously I meant post-tax (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079588) |
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Date: July 7th, 2025 3:27 PM Author: electric prole site Between $5.3m - $7.5m depending on various assumptions and desired level of conservatism. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079633) |
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Date: July 7th, 2025 3:53 PM Author: Scarlet mind-boggling place of business what the fuck are you buying every year? (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079741) |
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Date: July 7th, 2025 3:58 PM Author: Provocative sepia nursing home I dunno. Might enjoy having a place to live, food to eat, clothes to wear, and so on. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079756) |
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Date: July 7th, 2025 5:14 PM Author: Scarlet mind-boggling place of business you can do that for far less even in blue states. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49080051) |
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Date: July 7th, 2025 3:36 PM Author: impertinent coffee pot hell Think of it this way. Hedge funds typically charge 2 and 20 (2% management fee on the principal, plus 20% of that year's return as a performance fee). So think of yourself as the manager of your personal "fund".
If you assume you're getting an 5% rate of return on your invested capital on average (pretty conservative), then you'd need $6,666,667. This would give a management fee of $133,333 plus a performance fee of $66,667 (6,666,667 * .05 * .20), which adds up to $200k. If you assume a 10% rate of return (maybe too aggressive) then you'd only need $5 million.
I am ignoring taxes here, you'd need a higher amount if you want $200k post tax. |
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Date: July 7th, 2025 3:41 PM Author: Topaz Vivacious Striped Hyena answers like this always amaze me on xo. basic percentages but no reference to the fact that a guy who has 6.7mm in 2025 america shouldnt be thinking about "hedge funds" at all. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079685) |
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Date: July 7th, 2025 3:50 PM Author: Swollen aqua plaza This makes no sense. OP, don’t think about it this way. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079724) |
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Date: July 7th, 2025 4:27 PM Author: impertinent coffee pot hell And yet, the answer it gives (between 5 and 7 million) is the same as everyone else is saying. It's a reasonable rule of thumb that still lets the principal grow. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079896) |
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Date: July 7th, 2025 3:59 PM Author: Painfully honest pink crackhouse Lmao (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079760) |
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Date: July 7th, 2025 3:52 PM Author: Scarlet mind-boggling place of business you probably literally only need $4m for that. Assuming you are reasonable with it. e.g., take out less during down market years, take out more when the market is up/stable. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079738) |
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Date: July 7th, 2025 3:56 PM Author: Provocative sepia nursing home I'll probably have $10 million or thereabouts when I hit The Wall in a couple years (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079751) |
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Date: July 7th, 2025 3:59 PM Author: Topaz Vivacious Striped Hyena the reality though is that you should actually spend the 200k or even 100k unless youre puting a kid through college or something. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079762) |
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Date: July 7th, 2025 4:01 PM Author: Provocative sepia nursing home You wanna try that again (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079775) |
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Date: July 7th, 2025 5:15 PM Author: Scarlet mind-boggling place of business he clearly meant "shouldn't" (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49080054) |
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Date: July 7th, 2025 4:00 PM Author: Dashing lemon native Depends, how much of the principal do you want to leave behind? Assuming all or most of it, and a 4-6% withdrawal rate and 35% estimated taxes you'd need between 5-7.5m. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079773) |
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Date: July 7th, 2025 4:02 PM Author: Provocative sepia nursing home Leave behind for what (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079779) |
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Date: July 7th, 2025 4:02 PM Author: Dashing lemon native whatever you want my friend. kids, family, charity, etc. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079783) |
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Date: July 7th, 2025 4:39 PM Author: Swashbuckling lay affirmative action fuck jews (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079946) |
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Date: July 7th, 2025 5:36 PM Author: electric prole site "Leaving behind" makes almost no sense unless you're talking truly generational wealth, which the OP isn't. It's another shit boomer concept, i.e., it's cool to be shitty egoists all your life because you'll leave son Johnny and daughter Lisa $4.1m when you die at 93 which will somehow absolve your sins. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49080120) |
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Date: July 7th, 2025 4:22 PM Author: alcoholic tan toaster why is everyone assuming ~1/3 in taxes? that’s a high blended rate for that level of income in the first place, and i wouldn’t think it would be too hard to structure most of the income as LTCG. this admittedly leaves aside the issue of taxes remaining close their current rates indefinitely. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079865) |
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Date: July 7th, 2025 4:46 PM Author: Dashing lemon native generally retirement income from QPs is ordinary income. (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49079978) |
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Date: July 7th, 2025 8:34 PM Author: alcoholic tan toaster withdrawals from 401(k)s and the like, yes. but i don’t think someone with $5-10M in cash/stocks/bonds has most of that in a 401(k). (http://www.autoadmit.com/thread.php?thread_id=5747172&forum_id=2],#49080738) |