Join Date: Aug 2006
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Living on 7% return was mentioned. Great when you can get it but what do you do the year the market drops 10%?
Most financial planners will tell you to plan on only using 3 to 4% of your returns to live on. The rest of your returns of 6 or 7% go to offset inflation and market losses when they occur.
So if you have $100,000; you should only count on $3,000 to $4,000 per year if you want that money to keep up with inflation and market fluctutions.
So the $500,000 should only be counted on to generate $15,000 to $20,000 per year.
For someone over 50, health insurance alone could eat most of that!