For example:
We need retirement expenses of $10,000 at age 55.
Using dual portfolio strategy - Passive and Active income
Portfolio A to generate fixed passive income of $10,000 from 55 till 80 years old.
Portfolio B to generate active income to offset inflation from 55 till 80 years old.
See table for capital required for Portfolio B and its ROC.
Conclusion
- With draw-down method, you can retire with 25 times your expected annual expenses at 55
- With no draw-down method, you may need 30 - 32 times or even much more your expected annual expenses at 55 as compounding the portfolio returns at 8.7% - 7.2% through the next 25 years of Bull and Bear market cycle is not easy.
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