Dreaming...

[REWahoo]

Originally Posted by explanade

Where does this guideline come from?

Seems like I've seen references to 3 or 4 % references in various other threads and posts.

Is this a consensus or one opinion?

To quote Dory36, the guy who wrote the FIRECalc program:

The "4% Rule" is shorthand for a lot of research by a lot of different people that finds, in general, long term withdrawals are sustainable if they are roughly 4% of the portfolio, when there are no other sources of funds (Social Security, etc.) and no variations in the spending throughout the retirement.

The source of the 4% rule is research done about ten years ago and published in the Trinity Study. Here is an old thread that discusses it in some detail:

http://www.early-retirement.org/foru...ate-19234.html

[explanade]

If you're living expenses are under 4%, would you withdraw 3% or still withdraw 4% but reinvest the remainder or better to leave what you don't need in existing investments?

[REWahoo]

If I could live the way I wanted to withdrawing less than 4%, I would do so. It will make your heirs very happy.

[Nords]

Originally Posted by REWahoo

If I could live the way I wanted to withdrawing less than 4%, I would do so. It will make your heirs very happy.

We could call those lifestyles "With the Class A" and "Without the Class A".

Originally Posted by explanade

If you're living expenses are under 4%, would you withdraw 3% or still withdraw 4% but reinvest the remainder or better to leave what you don't need in existing investments?

See, that's the neat thing about the 4% thumbrule-- it's your choice. If you're younger then you might choose to reinvest and sleep more soundly at night. If you're older (or with less than 30 years to live!) then you can probably spend it without a second thought to enjoy experiences that will guarantee that you'll sleep more soundly at night...

Another consideration would be putting the excess in a charitable remainder trust that would generate "just in case" income while funding your legacy. The challenge is finding a CRT you care to fund (although many non-profits would be happy to help you in your quest) that would take the donation in small increments over a number of years.

[REWahoo]

Originally Posted by Nords

We could call those lifestyles "With the Class A" and "Without the Class A".

Yep. "With the Prius" and "Without the Prius" works, too - although on a slightly different level...

[Nords]

Originally Posted by REWahoo

Yep. "With the Prius" and "Without the Prius" works, too - although on a slightly different level...

How big is the luggage bin on your Class A? Does it have wheel ramps?

[Bankerwithabrain]

I thought I would update everyone on my progress towards ER, as well as keep a record for myself of my financial situation, as well as keep me motivated for the future.

Current financial situation:
Assets:$220k (divided in stocks, money markets)
Liabilities: $15k (low yield student loans)
Income: $135k/yr

Recently got bonus so assets shot up a little.

I've still got my eye on that 30 goal.

[ohfrugalone]

I say accumulate while you can. You may burn out and it may not be tons of fun - but if you can sock away enough for a few years, it will be worth it. It is only a few years. Hell, I am working a job I hate for a few years for only a few paltry thousand dollars more!

[jIMOh]

Originally Posted by explanade

Where does this guideline come from?

Seems like I've seen references to 3 or 4 % references in various other threads and posts.

Is this a consensus or one opinion?

It is opinion which is based on consensus, backtesting (monte carlo) and a number of assumptions based on spending and asset allocation.

But the guideline persists through most planning efforts.

4% is 25X current expenses
I would not start detailed planning (choosing dates) until you have 12X in the bank- at that point you have one double to go (money needs to double once and you are at the goal).
Even 25X may not be enough for a long retirement. What is long to you might be normal for someone else. IMO 4%/25X will last for about 35 years. If you retire early, you will probably use a lower percentage (I use 3%/33X).

[jIMOh]

Originally Posted by Bankerwithabrain

I thought I would update everyone on my progress towards ER, as well as keep a record for myself of my financial situation, as well as keep me motivated for the future.

Current financial situation:
Assets:$220k (divided in stocks, money markets)
Liabilities: $15k (low yield student loans)
Income: $135k/yr

Recently got bonus so assets shot up a little.

I've still got my eye on that 30 goal.

One point- I read on previous page you are looking at 1.5 M at age 30... but others said you would need 3 M+ because of kids and education. My comment would be if you could hit 1.5M at 30, you could let that money ride for about 7 more years and have your 3 M at age 37 or 38 without much furtner contributions- consider then downsizing career at age 30 to something more to your liking (you would not need to save so much).