
My Parents Give Me $28,000 a Year - blopeur
https://www.ejroller.com/2018/10/25/my-parents-give-me-28000-a-year/
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nhkssol
> Say a couple has $10 million in the bank. With $10,000,000, they
> consistently make $400,000 a year from investments managed by an investment
> banker. They pay 15% taxes on those gains. So they bring home $340,000 a
> year, without working a minute. That’s a big chunk of money.

Yes it is, but not in the context.

Inflation is currently 2.3%. To keep the value of a $10,000,000 lump sum, you
need to earn $230,000 a year from your investments. If you bring home $340,000
after tax and give your child $28,000 a year, that's $82,000 left over for you
to live on if you don't want your fortune to dwindle in real terms.

$82,000 would disappear relatively quick if you're a couple adjusted to the
millionaire lifestyle.

~~~
CompelTechnic
A bit late, but-

The 4% rule that was (likely, because author did not cite references) used to
determine the $400,000 number comes from the Trinity Study, where the study
authors made a determination of a safe withdrawal rate that is likely to leave
the principal intact in a 30 year retirement, after adjusting for inflation. A
3.5% withdrawal rate will similarly have a >95% chance of lasting for
perpituity if we assume the future acts similarly to the last 100+ years of
historical data. These both assume your spending is indexed to inflation.

So the $230,000 you provided is zero. Starting with $10,000,000 at 3.5%, taxed
15%, we are left with $297,500 for the parents to spend as they wish. Giving
$28k to the kids is a small fraction of this that leaves lots left.

There's also a couple thousand to add to this due to standard deduction, other
tax strategies, etc.

