Case Study: Simplified and Hypothetical
- $1,000,000 – in a retirement account
- 1% total annual fees, expenses and costs – ($10,000 per year on the $1,000,000)
- 5% total return (exactly!) every single year for 30 years. ($50,000)
- 4% withdrawal -- $40,000 (exactly) every single year for 30 years.
In this hypothetical world, there is
- Zero inflation
- Zero other costs e.g. Turnover
- Levelized RMD's (again, oversimplified)
Conclusions
- $1,500,000 total return ($50,000 x 30 years)
- $1.200,000 total withdrawals -- $40,000 X 30 years
- $300,000 total fees -- $10,000 X 30 years
- $1,000,000 (exactly) left at the end of the 30 years