tag:blogger.com,1999:blog-5599017594616837319.post6755497164721732487..comments2023-07-08T10:54:11.279-07:00Comments on My journey to financial independence - www.niterainbow.com: Four percent rule Unknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5599017594616837319.post-70616118084741075182020-11-13T11:25:47.892-08:002020-11-13T11:25:47.892-08:00Hello David,
Man thanks for stopping by.
Indeed,...Hello David, <br />Man thanks for stopping by.<br /><br />Indeed, in the table there is such assumption was made. However, down below there is clarification, that if Joe will put aside $12,000 he would get $600. Assuming, that he has 20 years to wait, his pension will be $1,200 (inflation adjusted). Typically when average Joe reaches $103,000 a year there is no time left for compounding interest. This is well above average salary in the UK.<br /><br />The defined benefits schemes are thing of the past in the UK too. Hence I was taking current market conversion of $20,000 in pension savings will buy $1,000 a year of pension for life. This amount is adjusted for inflation, in line with the government published CPI.<br /><br />I was aiming to compare apples to apples in the last part of the article. For me it is also hard to imagine that somebody in his 70s will be managing his /her pension otherwise. Financial Independencehttps://www.niterainbow.comnoreply@blogger.comtag:blogger.com,1999:blog-5599017594616837319.post-37124290524267701682020-11-08T11:50:39.326-08:002020-11-08T11:50:39.326-08:00You seem to be assuming that the $8000 is converte...You seem to be assuming that the $8000 is converted immediately into $400 worth of pension rather than growing until retirement and then buying an annuity? In Australia defined benefit schemes are now rare outside of the public sector and many in the public sector don't have them either. Very few people would buy an annuity voluntarily when they retire here.David Sternhttps://www.blogger.com/profile/16744705511660270649noreply@blogger.com