[winfred]

Harder than you think. It means you need consistent 6% returns (2% inflation, 4% return).

There's nothing out there that I know that gives you a consistent 6% return and the stock market is a fickle mistress. 2007 to 2009, VTI dropped over 50%. That 1% reduction in drawdown isn't going to be of much help much when your $1M turned into $500K, you'll need a job.

But you stopped working for a while, so now your resume makes you less desirable than the competition and exactly when you need more income (at the bottom of the recession) the job market is at its worst. Likely it took you a few years to get that $1M and age discrimination is rampant in IT, further decreasing your odds of finding that job.

I think realistically, you need a significantly lower drawdown, more likely in the order of 2% or less to weather economic downturns. Without subsidized healthcare, that's going to be very hard to do with $1M, but I think it's doable with $2M.

[o-__-o]

You wouldn’t have your retirement 100% in equities though, you would be way more risk adverse. So in 2007-2009 you may have only took a 20% hit only to see that rebound by 120% within 2 years. In fact if you were paying attention in that time you likely would have loaded up on equities and rebounded a lot further. But you can see this is an edge case. Remove those years from the last 30 and you’ll see the 4% drawdown would have covered you perfectly through that time.

I think you are right $1m is becoming shallow these days, but that doesnt change the significance of my statement

[tempsy]

It’s up 30% this year and we’ve been in a 10 year bull market.

Index and real estate funds pay actual dividends, which you didn’t mention, outside of just relying on rising share prices.

There are some slightly more advanced ways to generate income like selling options premiums that can generate income when prices are relatively flat.