this post was submitted on 08 Sep 2023
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Showerthoughts

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A "Showerthought" is a simple term used to describe the thoughts that pop into your head while you're doing everyday things like taking a shower, driving, or just daydreaming. A showerthought should offer a unique perspective on an ordinary part of life.

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Saying you feel like a million bucks is like 'meh' in today's economy. (lemm.ee)
submitted 1 year ago by [email protected] to c/showerthoughts
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[โ€“] [email protected] 5 points 1 year ago (1 children)

No, you always take less than the increase. This is why most FIRE plans revolve around living on 3-4%. The gain percentage minus withdrawal percentage should ideally leave you with a number greater than the losses due to inflation.

[โ€“] [email protected] 2 points 1 year ago

To add to this, you are also expected to withdraw more year after year along with inflation. If your safe withdrawal rate allows you to withdraw $40,000 on year one, you can withdraw $40,800 the second year (assuming 2% inflation). Dispite this increase, your portfolio should still grow. If you are withdrawing all of your gains, you are setting yourself up for failure.