Hacker News Reader

5% treasuries mean you lose money to inflation. It’s $50k/yr today but in many years it isn’t worth that. Broad market stocks are much more reliable if you want income forever.

You "lose money to inflation" no matter what asset you hold or what return you get. If you mean the real interest rate is negative, the CPI inflation rate is currently 3.4% in the US.

I don’t mean the actual interest rate is negative. I mean that if you intend to pull $50k/yr from it inflation adjusted, you won’t be able to keep up with a 5% return. You would need 8% returns per year to keep up with a $50k/yr drawdown, assuming a 3% inflation rate.

The other option is you pull a fixed 50k/yr, but then your purchasing power decreases dramatically over time. In 10 years at 3% inflation per year you would need 67k/yr to have the same purchasing power as today.

You'd only want to do that if you give up your job/income and need all of the income from the capital, right?

There are alternatives of varying risks that pay more frequently.