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Old 12-30-2014, 05:04 PM   #21
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There are two basic retirement "sins." The first, which I am guilty of, it the OMY well after you have enough for a solid retirement. The second is to have amassed a decent retirement fund and then parsimoniously dole it out like Ebeneezer Scrooge. You can't take it with you. You will probably be spending less naturally when you are in your 80s anyway so why be so worried about under 3% withdrawal rates?

I heard of "mines bigger than yours" but we seem to be having a "I using less than you" type of discussions.
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Old 12-30-2014, 05:13 PM   #22
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There are two basic retirement "sins." The first, which I am guilty of, it the OMY well after you have enough for a solid retirement. The second is to have amassed a decent retirement fund and then parsimoniously dole it out like Ebeneezer Scrooge. You can't take it with you. You will probably be spending less naturally when you are in your 80s anyway so why be so worried about under 3% withdrawal rates?

I heard of "mines bigger than yours" but we seem to be having a "I using less than you" type of discussions.
A lot of people probably missed what I said, buried back in post #8 of this thread:

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Possible house buying adventure: I will not feel one bit bad about withdrawing considerably more this year, later on, if I find my dream house. I have no intention of engaging in LBYM competition with this group and every intention of spending more soon. I feel Father Time breathing down my neck now that I am already 66 years old (OMG, how did THAT happen? ), and you can't take it with you!
I hope I am not spending less in my 80's, as you suggest! Hopefully by then I will be in a much nicer house, with appropriately higher spending due to upgraded house and lifestyle.
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Old 12-30-2014, 05:25 PM   #23
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There are two basic retirement "sins." The first, which I am guilty of, it the OMY well after you have enough for a solid retirement. The second is to have amassed a decent retirement fund and then parsimoniously dole it out like Ebeneezer Scrooge. You can't take it with you...
Ugh! You made me look.

Here are my WR's for the last 3 years since my full retirement started:

2012: 3.95%
2013: 3.66%
2014: 4.06%

The WR is computed as (expenses)/(portfolio value), where the portfolio is taken as the average of the values at the beginning and end of the year.

I am not that Scroogy, am I?

PS. I do not have a fixed budget, and am willing to spend more or to cut back discretionary spending depending on how my portfolio is performing. As I transfer money from investable accounts to the checking account on a monthly basis, I can't help but pay attention to the present value of the portfolio.
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Old 12-30-2014, 05:57 PM   #24
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WR = 1.05% on a massive portfolio value.




... just kidding
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Old 12-30-2014, 06:02 PM   #25
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Here are my WR's for the last 3 years since my full retirement started:

2012: 3.95%
2013: 3.66%
2014: 4.06%

The WR is computed as (expenses)/(portfolio value), where the portfolio is taken as the average of the values at the beginning and end of the year.

I am not that Scroogy, am I?
I think it depends a lot on your age. If you are in your 70s or 80s, you might be a little too Scroogy. But for a typical 30 year retirement expectancy, I think you are about where you want to be.
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Old 12-30-2014, 06:32 PM   #26
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I think it depends a lot on your age. If you are in your 70s or 80s, you might be a little too Scroogy. But for a typical 30 year retirement expectancy, I think you are about where you want to be.
Aren't we assuming a certain wealth in many of these comments?

Example: NW-Bound is spending about 4% of his portfolio. But the big secret is he hasn't told us that the massive portfolio he manages is $50M. I'm not going to worry if he draws this down to a mere $5M through possible poor spending decisions and poor portfolio performance (sorry NW-Bound, this is only a fictional example but I did award you a massive portfolio ). In this case the 4% spending hides a lot. He could have spent only 1% and not been at all a Scrooge in my view.
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Old 12-30-2014, 06:50 PM   #27
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Good points both, about the age and wealth of the retiree.

I am not a youngster, but still have a few years till SS. FIRECalc says I can go as high as 5.5% when SS is considered. And if I go with Bernicke's plan, which I strongly believe my spending pattern will fit, then I can spend even higher.

The above is mitigated by my pessimism that investment returns will not be great in future years. Hence, I think a 3.5%WR is about right even if I have SS coming.

And speaking of real wealth, can we imagine Buffett or Gates spending 4%WR? The billionaires of yesteryear like Rockefeller, Morgan, Hearst, etc... might have spent 4% back then, but nowadays such decadence would not be PC.
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Old 12-30-2014, 06:54 PM   #28
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Good points both, about the age and wealth of the retiree.

I am not a youngster, but still have a few years till SS. FIRECalc says I can go as high as 5.5% when SS is considered. And if I go with Bernicke's plan, which I strongly believe my spending pattern will fit, then I can spend even higher.

The above is mitigated by my pessimism that investment returns will not be great in future years. Hence, I think a 3.5%WR is about right even if I have SS coming.

And speaking of real wealth, can we imagine Buffett or Gates spending 4%WR? The billionaires of yesteryear like Rockefeller, Morgan, Hearst, etc... might have spent 4% back then, but nowadays such decadence would not be PC.
That's why they donate so much of it.
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Old 12-30-2014, 10:44 PM   #29
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This thread will probably cause me to actually calculate mine. Our typical annual withdrawals in relation to our initial retirement nestegg when we retired was ~3.75% but in the 3 years our portfolio has increased about 20% and we have not seen the need to give ourselves a raise, so based on our current portfolio it is probably ~ 3.0%.

I plan to calculate two rates each year - the year's withdrawals divided by our retirement date nestegg and divided by the beginning of year balance.... along with a prospective WR based on 2015 planned withdrawals.
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Old 12-30-2014, 11:05 PM   #30
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I haven't finalized my SWR for 2014 yet, but a rough estimate of it will be about the same as what it was in 2013 and 2012, 1.8%. I use the end-of-year portfolio balance in the denominator. In 2009, 2010, and 2011, my first 3 years of ER, my SWR was around 2.5%, give or take a 0.1% but that was due more to my pre-ACA insurance premiums being much higher and my portfolio balance being a lot lower.
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Old 12-30-2014, 11:17 PM   #31
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There are two basic retirement "sins." The first, which I am guilty of, it the OMY well after you have enough for a solid retirement. The second is to have amassed a decent retirement fund and then parsimoniously dole it out like Ebeneezer Scrooge. You can't take it with you. You will probably be spending less naturally when you are in your 80s anyway so why be so worried about under 3% withdrawal rates?
Thank you 2B for your comments. I find the under 3% WR discussions worrisome because I do not intend such a low WR. I ask myself - am I miscalculating my ability to RE? I think not. FI for me is being able to live comfortably on a 3% (or less), but living it up or giving it away at 5% (pre-SS) and 4% (after SS). You can't take it with you.
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Old 12-31-2014, 12:42 AM   #32
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I'll be withdrawing the same dollar amount that I've been withdrawing since I started, just 2.5 years ago. The WR was about 2.45% of the starting value and still is, of course, though it is now about 2% of the current portfolio.

I'm going to keep up this constant dollar withdrawal until things start to hurt a bit, or until the urge to purchase a used class C RV gets the better of me
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Old 12-31-2014, 05:53 AM   #33
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I am going with 2.5% of end of year portfolio. That's a slightly higher rate than the last couple of years. I am 50 years old so still taking a pretty conservative approach.

Frankly, 2.5% is more $ than I need to live comfortably, and I would be surprised if I actually spend that much.


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Old 12-31-2014, 06:46 AM   #34
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We will withdraw around 4%, the exact percentage will be determined at the close of 2014 later today.
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Old 12-31-2014, 06:59 AM   #35
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I seem to have changed the thread a bit so I'll expand my comment a little.

Being a OMY-er for so long has let me accumulate more than I really need to support the lifestyle I and DW have been living. That can actually be supported by our SS and pensions. The pensions will start next year - non-COLA'd and relatively small. SS is a few years off.

Once I create my SS bridge fund, the rest of the portfolio is actually "extra." I'm not including traveling in our basic budget and it certainly isn't a "need." Plus there are also other nice extras available for a little more money than we would typically spend. Therefore, I've decided to allocate 5% of the "extra" portfolio to these more decadent spending options. The market may go up or down but I'll never run out of money. I'll just have more or less in my extra fund each year. I really don't think I can spend it all in 2015. I'm already having trouble getting DW to commit to a couple of trips.
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Old 12-31-2014, 07:22 AM   #36
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I figure DW and mine as separate accounts. We split expenses about 70 me/30 her. I'll withdraw around 3.0% of my portfolio. She'll take her pension with no withdrawal of her IRA.
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Old 12-31-2014, 12:49 PM   #37
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WR = 1.05% on a massive portfolio value.




... just kidding


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To those of you posting your WR, are you measuring it against your initial portfolio amount or your current portfolio amount?
I prefer to take the current portfolio amount.

Both retired in 2009. At the time dh was 54 and yours truly 51. DH receives a small non cola'd pension.

2009 Projected WR.....0 (dh worked part of that year, we had to take no reserves)
2010 Projected WR....3%......Actual 2.71%
2011 Projected WR....3%......Actual 3.27% (health issues)
2012 Projected WR....3%......Actual 2.87%
2013 Projected WR....3.5%...Actual 4.94% (new car)
2014 Projected WR....3.5%...Actual >3% (all numbers aren't in yet)
2015 Projected WR....3.5%...Actual.....who knows?

In 2016 dh will start taking SS. We could drop our WR lower, but at this point I plan to keep the WR at around 3%...even when I get my SS in 2019.

Projections/plans can change...often times more than not.

btw...Firecalc says we can spend 70% more than we do... Unless we get a wild hair or something big blows up, I don't see that happening.
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Old 12-31-2014, 01:05 PM   #38
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About 3%, but I could easily go to 4% if needed. Actually, I had planned on having a 5% WR until SS kicks in at 70. But, it seems I am not spending as much as I thought I would. Bad me for not helping out the economy.
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Old 12-31-2014, 01:16 PM   #39
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About 3%, but I could easily go to 4% if needed. Actually, I had planned on having a 5% WR until SS kicks in at 70. But, it seems I am not spending as much as I thought I would. Bad me for not helping out the economy.
That is what is happening to me, but I figure I can make up for it in one fell swoop if/when I find and buy my dream house. Likewise, some others can go on dream vacations if they like to travel, or buy that pricey car or boat, or get that elusive college degree or whatever their dream may be.

I figure that spending doesn't have to be constant during the entirety of retirement. As much as people criticize when one's WR is low, they will probably criticize just as much or more in years when it is high. You can't win unless you withdraw exactly 3.5% every year, and who lives like that? Well, maybe some really do, but not everybody. I think most of us tend to do what we think is best in our individual situations.
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Old 12-31-2014, 01:40 PM   #40
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Although 3.5% WR of current portfolio value has been my goal, I have been exceeding it for the first 3 years of full retirement. And my expenses are quite lumpy. When unexpected things happen that call for money to be spent, one often cannot wait.

Still, I need to set a goal to work towards, else who knows what deluge might happen if the flood gate opens? Looking forward to next year, a lot of expenses this year will not recur, but something else may happen. If it's not one thing, then it's 'nother. I am having fun, and in the end that's what counts.
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