Tag Archives: retirement

BECAUSE WE FORGET SO QUICKLY…35 YEARS AGO A FINANCIAL PLANNER ASKED ME HOW MUCH I WOULD EVENTUALLY LIKE TO PULL OUT, ANNUALLY, FROM MY INVESTMENTS, IN ORDER TO FUND MY LIVING EXPENSES DURING RETIREMENT. I HAD READ THAT A 6% ANNUAL WITHDRAWAL WOULD BE HISTORICALLY SUSTAINABLE, SO I SUGGESTED 6%. HE THOUGHT THAT WAS PERFECTLY REASONABLE. SOMEWHERE BETWEEN THEN AND NOW, WE HAVE DOWNGRADED OUR EXPECTATIONS AND WE HAVE NOW NAMED IT THE, “4% RULE” (https://www.investopedia.com/terms/f/four-percent-rule.asp).

OHH, WAIT…4%…how about 3.3%…OR MAYBE 3.0%! (https://www.marketwatch.com/story/the-4-rule-is-being-debated-again-but-heres-what-you-should-do-11636999447). (https://www.barrons.com/articles/retirement-4-percent-rule-downturn-strategy-51642806039). https://finance.yahoo.com/news/author-discovers-most-important-financial-skill-for-achieving-financial-freedom-115918521.html Charles Tadros, M.D. December 21, 2021 Saint Louis, Missouri

WE HAVE BEEN TOLD DRAMATICALLY INCOMPLETE, IF NOT INCORRECT, INFORMATION ALL THESE YEARS. IN ORDER TO RETIRE COMFORTABLY, WE DO NOT NEED TO SAVE, THEN INVEST, JUST 10-20% OF OUR PRE-TAX INCOME DURING OUR 30-40 YEARS OF EMPLOYMENT. WE REALLY NEED TO SAVE AND INVEST 75% OF OUR INCOME FOR THE FIRST 10 OR 15 YEARS WHEN WE START MAKING MONEY (“Ma, I’m moving back into the basement!). THIS AMOUNT IS INVESTED INTO A PRE-TAX, LOW COST S&P INDEX FUND UNTIL WE RETIRE. I CALL THIS FRONT-LOADING OUR SAVINGS AND INVESTMENTS.

What we actually SAVE, even if our cost of living is much less when we retire, will not be even close to what we need in order to retire for the typical 20-30 years of retirement. We need the additional money brought in by LONG-TERM INVESTMENTS. During our working years, we will be adding fundsContinue reading “WE HAVE BEEN TOLD DRAMATICALLY INCOMPLETE, IF NOT INCORRECT, INFORMATION ALL THESE YEARS. IN ORDER TO RETIRE COMFORTABLY, WE DO NOT NEED TO SAVE, THEN INVEST, JUST 10-20% OF OUR PRE-TAX INCOME DURING OUR 30-40 YEARS OF EMPLOYMENT. WE REALLY NEED TO SAVE AND INVEST 75% OF OUR INCOME FOR THE FIRST 10 OR 15 YEARS WHEN WE START MAKING MONEY (“Ma, I’m moving back into the basement!). THIS AMOUNT IS INVESTED INTO A PRE-TAX, LOW COST S&P INDEX FUND UNTIL WE RETIRE. I CALL THIS FRONT-LOADING OUR SAVINGS AND INVESTMENTS.”

SOMEONE ONCE SAID, “WE SHOULD RETIRE UNTIL AGE 40 (while we tend to have better health and more energy), THEN WORK UNTIL WE DIE (for camaraderie, daily routine, sense of purpose, and money).”

Charles Tadros, M.D. August 19, 2021 Saint Louis, Missouri

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