FP Answers: Is $1 million in savings enough to retire on if we withdraw 4% per year?

financialpost.com:

By Julie Cazzin with Allan Norman

Q: My wife Sherry and I are both 54 years old and we have a daughter in her third year of university. Sherry earns $80,000 per year and will retire next year with an annual, indexed pension of $30,000 per year. She plans to continue working part time at $35,000 per year until she’s 60. I’ll hopefully stop working at age 58. Our assets include a $900,000 mortgage-free home, $395,000 in Sherry’s registered retirement savings plan (RRSP), $580,000 in my RRSP, $245,000 in my locked-in retirement account (LIRA) and $85,000 in our combined tax-free savings accounts (TFSAs). At age 29, I discovered an internet calculator suggesting we needed to save $750 per month at seven per cent to eight per cent returns annually to have $1 million by age 52 and we could then retire at age 55. We hit $1 million at age 50, but with COVID-19 and inflation, I may delay retirement until I’m 58. I estimate we will need an annual taxable retirement income of $75,000 per year and I really like the four per cent rule for annual withdrawals. Will our money last through our retirement?

FP Answers: Murray, congratulations to both of you for exceeding your investment goal by accumulating $1 million by the age of 50. That’s fantastic. It’s amazing what can be accomplished just by following a few simple financial planning rules. There is a risk, however, that comes with following the rules and that risk is called regret — regret that you didn’t do things when you could have or when they had more meaning to you.

I know you like the four per cent safe withdrawal rule (SWR) and why not? Simply put, the safe withdrawal method calculates how much a retiree can annually withdraw from their retirement assets without running