Context first: I am 71. I am semi-retired. I'm an active participant in two small business ventures which hopefully will make money this year. But, I don't rely on them for cash flow.

I always been focused on 2%; I can spend 2% of my total net worth (net of my personal residential real estate) because, OVER TIME, the average increase in my net worth exceeds that percentage amount (based on appreciation and additions that I annually make). When I was younger, 2% of my net worth wasn't sufficient to pay my bills so I continued to work. Over the years, I've tried not to invade capital for current expenditures and, as an older person, I try to budge a huge amount for unknowable medical bills.

My bottom line is do I have enough cash flow to live my life the way I want to live it: old or young, healthy or ill. It is a pretty straight-forward metric.