Just a quick answer here.
I was born in 1960 and full retirement age for me is 67 :(
If I understand the 4% rule of thumb right, it adjusts for inflation by allowing increasing amounts of withdrawal, which is why initial withdrawal is 4% while a good investing strategy should still yield 4% 'plus' [assumes you can beat putting it in the bank]. If it was 4% withdrawal and you earned 4% of course you'd not touch the principal, but the r.o.t. assumes you get into the principal pretty heavily at some later point due to the increases.
I don't know much about annuities but wonder if it is a good comparison - I have gathered that typical annuities from insurance companies are rip-offs, I assume you mean something more fairly run than those.
Quote: WizardQuote: odiousgambit
it sounds like you weren't talking about annuities
expecting to retire at the point where life expectancy is multi-decade, to figure being able to initially withdraw 4% of liquidatable assets and get an annual figure in income that should mean their money will not run out.
Something drastic has to be done.
Bernie Madoff would tell you, not so easy. It wasn't really a bad program, as much as all the money was used before it was needed and now it's a hostage to the dollar along with all the debt. Being based on worker to retiree ratios is more about the debt isn't it.Quote: Ibeatyouraces
Abolish it and give everyone their money back! It's been a scam from the get go.