10-27-2013, 03:38 PM
(10-27-2013, 03:07 PM)fiveoh Wrote: With a large allocation to bonds and if they are drawing down principal, they are going to be hurting when interest rates go up again. I don't know how anyone retires early without a pension or a very high income. I'm trying to do it but finding the amount of savings I need to be boggling on my middle class income. We would need about 60k annually to be comfortable, but I'd like to have a little more to travel, etc. I figure a 4% div yield on my portfolio at retirement means I need 1.5 mil to live off the div income. That's obviously in todays dollars not factoring in inflation.
I'm not sure of your age, but that's the adv of the DG strategy. You should get a growing income from your investments so that the 4% figure (of the portfolio value) during retirement is meaningless.
Just concentrate on the income you can get from your investments. Re-invest the dividends and let them compound to grow even faster. Probably by the time you retire your income should be considerably higher than 4% they refer to because it's income only, not a value from selling part of your holdings.