How Much Money Do You Need to Retire? It’s All About Final Glide

There’s a tried-and-true rule that works for most people, but not everyone.

Jason Depew

Thursday, February 24, 2022 at 12:24 PM ET

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The concept of final glide can also help with your finances. [File Photo: Adobe Stock]

Key Takeaways:

The article uses the analogy of a glider pilot's "final glide" calculation (determining maximum flight range to safely reach a destination based on glide ratio) to introduce a similar concept for financial planning.
It highlights the "Four Percent Rule," derived from the Trinity Study, which suggests that retirees can safely withdraw 4% of their initial investment portfolio annually (adjusted for inflation) with a high probability of their funds lasting for at least 30 years, often seeing portfolio growth.
This rule is presented as a robust and conservative guideline that helps individuals determine a safe annual spending limit from their investments or calculate the total investment required to support a desired retirement income.

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A good glider pilot can maximize flying fun for the dollar like no other. When I instructed at the Black Forest Soaring Society (BFSS) at Kelly Air Park in Colorado, the pilots with personal racing gliders would launch every Saturday or Sunday around noon. They’d immediately head west and start catching thermals before spending the rest of the day galavanting around the Rocky Mountains. We wouldn’t see them again until just before sunset after the thermals had all died out. They got all that flying for the reasonable cost of a monthly membership fee, and a $40 launch behind the club’s towplane.

The BFSS pilots knew they could safely reach home at the end of the day because they were able to calculate what glider pilots call “final glide.”