I’m referring to the Trinity study and subsequent interpretation that a person’s wealth needs at least 25 times his current annual expenses in order to retire without shrinking the portfolio.

What if I don’t want to leave a penny behind to anyone?

By age 65, instead of saving $250,000 for each $10,000 of annual expenses at that time, could I assume that I would not live past the 99th percentile of life span (around 100 years old), and use TVM calculator (-10,000 Payment, 0 Future Value, 4% Rate, 35 Periods) to obtain $186,646 for each $10,000 of annual expenses?

I’m not here to debate if the Trinity study is correct (I don’t care about emergency expense or global market crash).

My question: Can I follow a rule of 19X / 20X instead of 25X if I do not want to leave a huge sum of money behind.

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    One thing to keep in mind is that leaving exactly zero money behind requires impractically precise planning. Even leaving "almost zero" money behind may be too risky. If any of the assumptions in your plan turn out to be wrong, you may run out of money while you're still alive, and then you'll be in a tough spot. Most people err on the side of having a bit extra. Regardless of whether you "care about" a global market crash, your plan will always have assumptions, and they can always fail. – BrenBarn Apr 8 '15 at 1:50
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    There are products that could cover the risk of living too long- for example, the so-called longevity insurance (a kind of annuity product) and thus ensure you leave no money on the (autopsy) table, but predicting the amount of inflation far into the future is going to involve a certain amount of risk. – Spehro Pefhany Apr 8 '15 at 4:13
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    There are several ways to do this. The simple way is to spend everything as fast as you can, then commit suicide when it's gone. (Of course you still have a risk of dying unexpectedly, leaving something behind.) Second way is to invest everything in annuities. – jamesqf Apr 8 '15 at 6:55
  • I'm not sure if I understand the question being asked here. – fontophilic Apr 8 '15 at 19:41
  • If you can exactly predict your date of death and all costs up to that point, inflation rates, and rate of return ... then yes, you can run the numbers and get a threshold amount which will exactly meet that goal. Of course that requires five or six miracles to achieve.. so all you've done is demonstrate why that minimal amount is not sufficient in any real-life planning. – keshlam Apr 8 '15 at 22:22

According to my reading, the Trinity study says you can withdraw 4% a year for 30 years without exhausting your nest egg, not necessarily that it won't shrink. In most cases, your nest egg will indeed grow. But unfortunately you can't plan to leave no estate while simultaneously preparing for worst-case scenarios in case you happen to pick a bad year to stop working. You can run simulations based on historical data on sites like cFIREsim. And once you're retired, you could potentially increase your spending if simulations show that you're likely to leave behind a large estate. You also probably want to look into things like charitable remainder trusts.


The 20x number is drawn directly from the assumption that it should be easy to get more than 4% average return on investment. After lots of historical studies, Monte Carlo simulations, and the like there was a consensus that saving more didn't significantly increase the odds of achieving at least the desired yearly income sustainably. (That's the same calculations the insurance firms use as the starting point for writing annuities.) There are also some assumptions about inflation and its interaction with the market built into this rule-of-thumb.

Note that this is 20x what you want as post-retirement income, not necessarily 20x your current income. I have a moderately frugal lifestyle, And my budget confirms that my actual spending -- even in years when I allow myself a splurge -- is well below my current income, with the excess going into the investments. To sustain my lifestyle, I need that lower number plus any taxes that'll be due on it plus whatever I want to allocate as average emergency reserve... and theoretically I should be able to base the 20x on that lower number.

When I run estimates (Quicken has a tool for this, so does my credit union, I presume others are widely available), they tend to confirm this.

I'm still using the higher number for planning, though. I don't feel any need to retire early (though I have issues with my current manager), and I have no objection at all to being able to afford better toys on occasion. Or to leaving a legacy to friends, relatives, and/or charity.

But it's nice to know exactly when I could punt the day job if I wanted to.

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