I Ran the Numbers on Retiring 5 Years Early With VOO. Here's What Changed My Mind.
Yahoo Finance ·
Retiring early is a dream for many. Understanding whether it's a financially viable option is key. I ran the numbers for two different scenarios, both considering a portfolio 100% invested in the Vanguard S&P 500 ETF ( VOO -1.23% ) : Retiring at 60 and starting to withdraw from retirement savings immediately Retiring at 65, continuing to contribute for those extra five years, and letting it compound It's a very different outcome depending on which way you go. Spending plans, other sources of income, and other factors obviously play into which path you choose. But the gap between how much money you have in either scenario is significant, and it's worth breaking down the numbers. Assumption: I retire at 60 with $1.2 million invested and target a 4% annual withdrawal rate . Since I'm in retirement, I've switched to a more conservative investment mix with an expected annual return of 4%.
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