- What is a retirement corpus?
- A retirement corpus is the total accumulated wealth (investments, pensions, savings) required on your retirement date to generate sufficient recurring income to cover all living expenses for the rest of your life without running out of money.
- How does inflation affect the required retirement corpus?
- Inflation compounds over time, eroding purchasing power. An expense of $50,000 today will require over $120,000 annually in 30 years at 3% inflation. The corpus must account for both pre-retirement accumulation and post-retirement cost increases.
- What is a safe withdrawal rate from my retirement corpus?
- The traditional 4% rule suggests that withdrawing 4% in year one of retirement and adjusting for inflation each year historically sustains a diversified portfolio across a 30-year retirement horizon.