![]() Real annualized returns ranging from 2% to 8%. When reaching FI, most of their nest egg should be the contributions (cost basis), while traditional retirees rely much more on capital gains compounding over many decades! Time to FI as a function of the savings rate. That all makes perfect sense: early retirees with a very short horizon rely less on compound returns. For some of the higher savings rates, the reduction of the return rate from 5% to 2% adds only about a year to the FI path! For example, at a 60% savings rate going from a 5% return to a 2% average return, the path to FI goes from 12.2 to 14.4 years. The higher your savings rate and thus the shorter the horizon to FI, the less susceptible the length of the FI path becomes. ![]() Going from 5% to 2% could add a decade or more to the FI path!
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |