I’m 55 with $2.5 million saved and no debt and would like to increase my monthly spend by $4k – can I afford it?

How overmuch tin you safely walk successful status with $2.5 cardinal successful liquid investments? This is simply a question posted by a Reddit idiosyncratic recently.

The archetypal poster (OP) explained that helium is 55 years aged with $2.5 cardinal successful liquid investments but nary debt. He is presently spending astir $6,000 per period but would similar to spell up to $10K per period truthful helium tin spend to bash much things he'd bask including traveling more, surviving better, and helping his brother.

He wanted to cognize if he'd beryllium capable to spend the other spending and said helium was OK with his nett worthy going down implicit time. So, fixed those parameters, is helium OK to summation his expenditures?

While $2.5 cardinal whitethorn look similar a batch of money, the world is that the OP is conscionable 55 years aged and helium volition request these funds to past for the remainder of his life. So helium indispensable cautiously determine connected a harmless withdrawal complaint and can't conscionable commencement taking wealth retired due to the fact that helium wants to.

Experts utilized to judge it was harmless to retreat 4.00% of your status funds successful twelvemonth 1 and past marque adjustments based connected inflation, but this was revised precocious down to 3.7% due to the fact that of concerns astir longer lifespans and little projected returns successful the future. As a younger retiree, the OP truly should err connected the broadside of caution and travel the much blimpish withdrawal rate.

With a $2.5 cardinal nest egg, that would mean that he'd beryllium capable to retreat astir $92,500 per year. That puts him a small higher than his existent $6K successful spending, but not astir to $10,000.

He'd beryllium omniscient to bounds his withdrawals to the recommended magnitude to debar risking his nest ovum moving adust portion he's inactive depending connected his investments to unrecorded off.

The poster made wide successful his Reddit thread that helium was OK with spending down immoderate of his money. However, conscionable due to the fact that you are comfy with your portfolio equilibrium going down a spot does not mean that you tin transcend a harmless withdrawal rate.