Not sure how long your money will last in retirement? Your money should last longer than you think – that is, assuming you start with some capital and work to earn a return on it. If you are earning 1% but pulling out 10% of your capital each year ($10,000 out of $100,000 which is earning 1% or about $1,000 per year), your money (capital) will last ten years. How about earning 6 % and pulling out 5% each year? Your money will last indefinitely. Let’s use some bigger numbers: earn 9% and pull out 10% – your capital will last 26 years. People are surprised; capital lasts longer in retirement than they suspect – even when we go through Bear Markets. Remember every day in the stock market allows your money to either earn something or lose something and the sum total is not as bad as short term thinking believes.
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