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View Diary: Daily Kos Demographics Poll: What's your 401(k) balance? (39 comments)

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  •  That's less than 1 percent return (6+ / 0-)

    So that would be overly pessimistic.

    1% of $3.5 million is $35K. Add to that $30K ($2500/mo x 12 mo), and that yields $65K.

    I think if you're willing to put some of it at risk in the stock market or other investments, you would see quite a bit better than that -- perhaps 3 to 5 percent for that portion so invested. More if you're willing to take more risk.

    Alternatively, you could purchase an annuity if you're looking for more certainty.  I'm not that familiar with them, but with that much capital you probably could clear $5K to $10K per month, well over the $2100 per month you would need in addition to your Social Security to add up to $55K.

    And if you didn't care about leaving an inheritance, that $3.5 million, on top the $2500/mo SS (not accounting for COLA), would last someone 140 years if they kept it in their mattress and took out $25K per year to yield $55K.

    I may be going out on a limb here, but I don't think anyone's retirement has lasted 140 years.

    But I'm not a CPA.  Just a simple geologist.

    •  The old 4% rule on spending down retirement funds (1+ / 0-)
      Recommended by:
      peregrine kate

      ...has been broken by low interest rates, but I still would be comfortable enough taking 3% a year at 63 or 3.5% at 67.  I'd want 25% or so of the nest egg in the stock market, though.

      Locking in an annuity at today's low savings interest rates seems like a really bad idea to me.  

    •  Maybe he's a really bad financial planner. (0+ / 0-)

      "I'm really going to suck at making you money, so you better have some extra put away."

      "Michael Moore, who was filming a movie about corporate welfare called 'Capitalism: A Love Story,' sought and received incentives."

      by Bush Bites on Mon Mar 25, 2013 at 05:22:51 PM PDT

      [ Parent ]

      •  advisors are skittish after GWB crash (0+ / 0-)

        where investments lost 40% in days and $1M became $600K and CDs went from 3% or so down below 1%.  I think that is why a cushion is assumed that the 3.5M allows for a 40% drop and for a 1% return for a certain period of time.
        Certainly, $1m is not enough in liquid assets to feel completely safe these days, esp. when most people have the bulk of their net worth in their home equity

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