Couple’s $1.2M savings faces 7% withdrawal rate
A couple with $1.2 million in savings at 63 and an $185,000 mortgage still on the books faces a 7% withdrawal rate during ages 63-66.
This rate improves to a sustainable 2.5% after Social Security kicks in at 67.
The couple’s mortgage has 11 years left at 4.875% and costs $1,420 per month.
Keeping the mortgage and investing at expected 6% returns beats paying it off by roughly $2,081 annually after taxes.