Systematic Investing Group

[Toofuzzy]

OK So what if you figured out you need %50,000 / year in todays dollars and could count on being able to take out 5% / year safely. So if you had $1,000,000 you could retire today.

So you want to retire in 20 years so you take that $1 million and adjust it for 3% inflation compounded so for arguments sake lets say that is $2 million

So assume you can make 10% return on average, take what you have now and compounded by 10% then subtract that from the $2 million.

So lets say you still need to accumulate another $1 million So you figure out what you need to save / year to get to $1 million. Lets say that is $18,000 / year ($18,000 x 1.1 + $18,000 each year)


Finally I get to the meat of this post.

You can track where you want to be to be in savings. If you get ahead you can put the excess in cash or a bond fund and if you get behind you can take some money from the cash side to get back on track. This will automatically have you adding more cash at lower stock prices and lightening up when prices are higher.

Pretty much the Value Averaging method.

Toofuzzy