Because you're only taking out 5% of the current value. 5% of 10000 is 500, and even if you only have 100 left, you can still draw out 5%, but you'd only get 5.HanoiRocks wrote: ↑Tue Jan 15, 2019 8:52 pm Thanks for the reply. Sorry, I'm still confused as to why continually taking 5% out of your portfolio would not deplete the investment, continually shrinking as it would be?
You'd never run out, but you might not get enough out of it to do anything with.
There are some reasonably good blogs out there discussing how well your investment would weather a downwards crunch. In general it'd be bad to have a serious depression lasting several years right at the start of your retirement, while having some bounty early on followed by a crunch later would not hurt near as badly