- Recurring income vs. annual expenses. We've had pretty staple expenses over the past five years. As I build our portfolio of dividend paying stocks, CDs, rental properties/REITs, annuities and capital gains, I will compare the income from these investments as a percentage of annual expenses. The target is greater than or equal to 100%.
- Longevity of annual expenses or 4% withdrawals. There are calculators that show the expected years retirement savings will last at a specific withdrawal rate (with cost of living adjustments), and a specific invest return. I will use a conservative return equal to the U.S. 10 year bond. The target is greater than or equal to 35 years.
- 4% withdrawal rate vs. annual expenses. I will calculate the 4% withdrawal rate at the beginning of the year and compare it to our annual expenses. The target is greater than or equal to 100%.
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This is not financial advice. Please consult a professional advisor.
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