Stick The Landing: A Rational Approach To Wealth Decumulation
Chapter 36 of The Rational Investor
Welcome to another installment of project “passive wealth,” where I will be releasing my next book on investing (working title: “The Rational Investor”) chapter by chapter to paid subscribers of Making of a Millionaire.
Chapter 35: Stick The Landing: A Rational Approach To Wealth Decumulation
As the great Mike Tyson once said;
Everyone has a plan until you need to start withdrawing from your portfolio without a paycheck.
Of course, that is not the actual quote, but Tyson’s point applies to a very important financial reality we all have to deal with. Creating a financial plan in a spreadsheet is easy. Following through on that plan and pinning your quality of life in retirement to that plan takes a tremendous amount of courage and unwavering belief in the plan.
When paychecks stop coming in, financial planning gets scary
Saving for retirement in your 30s is an intellectual exercise.
Executing the plan in your 70s is an act of faith.
You make a plan (ideally) in your 20s or 30s, knowing you don’t have to execute the plan for another thirty or forty years.
A portion of every paycheck gets siphoned off to a retirement account.
The whole process runs on autopilot, and you basically forget about it.
Until one day, the paychecks stop coming in, and it’s time to execute the plan.
That’s when it dawn’s on you; executing the plan means slowing spending down the nest egg you spent your entire life building.
You’ve read all kinds of books and articles about how to save for retirement, but you quickly realize nobody ever told you how to spend in retirement.
That’s when fear and panic kick in.
The rule of thumb that looks good on paper
Keep reading with a 7-day free trial
Subscribe to Making of a Millionaire to keep reading this post and get 7 days of free access to the full post archives.