3 Simple Steps to Determine If You Can Retire
- 3 Simple Steps to Determine If You Can Retire James Conole, CFP® 21:19
How do you know if you can retire? It seems straightforward, but the answer is far from simple. Beyond portfolio balances and age thresholds, there are other things to consider. James explains his three-step test to determine your Retirement readiness.
By pulling together principles from the 4% Rule, straight-line projection, and a Monte Carlo analysis, you can assess whether your portfolio can sustain your desired Lifestyle over decades amid various market conditions. However, these tests alone don’t paint the complete picture. James emphasizes the importance of considering other assets like potential inheritances or property Downsizing to more fully and confidently evaluate when you can retire.
Questions Answered:
How can I determine if I’m financially ready to retire?
Is the 4% Rule sufficient for determining retirement readiness?
Timestamps:
0:00 – Consider withdrawal rate
2:14 – 4% Rule
5:12 – Not a perfect strategy
7:39 – Straight line projection
9:09 – Downside of SL projection
11:07 – Monte Carlo test
13:07 – Understand severity of failure
16:20 – Defining success,
18:25 – Looking ahead
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