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Old 12-31-2014, 01:42 PM   #41
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Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
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Old 12-31-2014, 01:55 PM   #42
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This is the first year I've really tracked expenses as retired, and compared to SWR, even tho I am still working part time. After a whole lot of travel, 2 international trips, boat buying, carpet replacement, lots of wine drinking, we are only at 4.4%, 1.2% if I add back in my earnings. I'm training my replacement in Jan /Feb, so again, we look like it's a go for FIRE. This is FUN!
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Old 12-31-2014, 02:01 PM   #43
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Originally Posted by REWahoo View Post
To those of you posting your WR, are you measuring it against your initial portfolio amount or your current portfolio amount?
First year of ER will be 2015, so for me they are one in the same .... but thank you - I haven't yet set up my spreadsheet to calc % of initial portfolio by year, so thats something I should do now !
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Old 12-31-2014, 02:59 PM   #44
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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.
DW and I bought a too big house (IMHO) three years ago when her father finally passed away. We have poured money into landscaping, patio and new furniture. These were meaningful expenses but they weren't budget busters under my plan. I don't think paying cash for a house really should be included in any year's WR calculation but it definitely would reduce the portfolio for future year.

I don't see where anyone would always spend exactly the same percentage unless they were of limited means and wanted to make sure they didn't run out.

My 5% spending (plus SS and pension) is more of a challenge to me. My 2015 budget is more than I have ever spent in any one year - not counting buying houses. It has become clear I have been working for my grandchildren for the last few years. I've committed the first sin of amassing more than I need. Now I want to avoid the second sin by not being miserly into the grave.
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Old 12-31-2014, 03:12 PM   #45
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Since we have 4 more income streams coming on line over the next 10 years with pensions, SS etc, then I don't have a real target % each year, instead I look at projections of what we can spend as per FIDO and FireCalc. We are also committed to high spending the first 6 or 7 years of retirement while we do lots of extensive travel.

This year was very expensive because of a 5 month trip "down under", replacement of our car and ROTH conversions to the top of the 25% bracket (planned move back to the UK in 2016).


YearTrinity1st of Year %
20100% 0%
20110.99%0.86%
20121.96%1.27%
20135.89%3.51%
20149.84%5.4%
20156.81%3.73%
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Old 12-31-2014, 03:14 PM   #46
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First full year of retirement, I'm at 1.0%. But DW is still working, so probably not a meaningful comparison to others. When she retires (next year?), and we replace her net pay with her pension annuity, the WR goes up to 1.7%. It will rise slowly after that, as one of the pensions is non-COLA. But when SS kicks in, it drops below 1.0% and then starts slowly rising again. We don't really plan anything based around WR, but that's the resulting profile. For now, I try to "insulate" DW from these figures, as her retail obsession habit hobby is the #1 threat to our retirement prospects.
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Old 12-31-2014, 03:20 PM   #47
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This year was very expensive because of a 5 month trip "down under", replacement of our car and ROTH conversions to the top of the 25% bracket...
Your Roth conversions caught my eyes. I have been doing Roth conversions too, but that does not count in my WR.

Yes, my conversions do result in WR from my before-tax accounts, but then my Roth account gain from the conversion. The only net WR is for paying taxes, and only the tax is counted.

I count as expenses or WR what leave my checking account, disappear and never to return. If it stays and still adds to Quicken's bottom line, it's still mine.

PS. On 2nd thought, perhaps you only counted the tax too. I just do not know your financial situation.
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Old 12-31-2014, 03:33 PM   #48
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I worked half the year this past year - and had unpaid PTO, etc to add to the coffers.

This next year, 2015, is my first full year of retirement. It looks like DH will be rejoining me within a few weeks. (He flunked retirement and went back to work part time.)

Our planned withdrawal from investments is 3.4%. Our total budget is higher - but we have rental income and DH has SS coming in.

We actually have one big spend that is off books - money set aside before I retired... a summer long vacation in Europe.
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Old 12-31-2014, 03:37 PM   #49
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I do not have money set aside for anything; money is fungible. It's all one big pot. It's at the bottom line of the Quicken screen.

So, I just think of all my big expenses as "one-time" non-recurrent expenses.

Of course they do not recur each year, but take turn happening one after another. Else, I would be in big trouble if they all occur each year.
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Old 12-31-2014, 03:47 PM   #50
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Your Roth conversions caught my eyes. I have been doing Roth conversions too, but that does not count in my WR.

Yes, my conversions do result in WR from my before-tax accounts, but then my Roth account gain from the conversion. The only net WR is for paying taxes, and only the tax is counted.

I count as expenses what leave my checking account, disappear and never to return. If it stays and still adds to Quicken's bottom line, it's still mine.

PS. On 2nd thought, perhaps you only counted the tax too. I just do not know your financial situation.
I count all taxes as expenses including those paid to do ROTH conversions, which come from after-tax accounts. (I don't count the actual amount converted as that was never withdrawn, just moved to a different account).

Our retirement savings have no adjustment for tax deferred IRA money, it is just a $ amount, and the total at the start of our retirement in 2010 had 0% ROTH, but ROTH money is now 19% of the total, and tax deferred is 27%. I suppose I am effectively moving money from taxable to tax-free as I pay taxes to do the conversion, and in the longer term it will result in lower taxes (expenses) when the ROTH is drawn down.
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Old 12-31-2014, 03:53 PM   #51
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OK. We are doing the same accounting. I forgot that you went up to the top of the 25% bracket, and that resulted in a big tax bill.

I am still taking my sweet time with the Roth conversion, but perhaps should figure out whether I should step that up. Our Roth is still only 5% of portfolio.
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Old 12-31-2014, 03:55 PM   #52
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3%. It seems to work for me.
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Old 12-31-2014, 04:00 PM   #53
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OK. We are doing the same accounting. I forgot that you went up to the top of the 25% bracket, and that resulted in a big tax bill.

I am still taking my sweet time with the Roth conversion, but perhaps should figure out whether I should step that up.
In my case the UK tax rates are 0/20/40/45 and I would bump up from the 20% to the 40% bracket with RMD's if I have too large a tax deferred pot.
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Old 12-31-2014, 04:01 PM   #54
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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?
Picky! Picky! Picky!
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Old 12-31-2014, 04:05 PM   #55
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I do not have money set aside for anything; money is fungible. It's all one big pot. It's at the bottom line of the Quicken screen.

So, I just think of all my big expenses as "one-time" non-recurrent expenses.

Of course they do not recur each year, but take turn happening one after another. Else, I would be in big trouble if they all occur each year.
Ok - by that accounting - our planned WR is 4.7% when I add back in the set aside money. (I have money set aside for new roof, solar panels, new car, and $25k planned. I still didn't include the 529's for the kids college... Since that is specific and dedicate... less fungible.
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Old 12-31-2014, 04:19 PM   #56
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Originally Posted by REWahoo View Post
To those of you posting your WR, are you measuring it against your initial portfolio amount or your current portfolio amount?
Quote:
Originally Posted by Chuckanut View Post
Picky! Picky! Picky!
To do it like FIRECalc, one must account for inflation since he started retirement. That's more work.

I will just go with current portfolio value, and if 2009 happens again, my stash shrinks and my roof leaks, I will buy some blue tarp.

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Ok - by that accounting - our planned WR is 4.7% when I add back in the set aside money. (I have money set aside for new roof, solar panels, new car, and $25k planned. I still didn't include the 529's for the kids college... Since that is specific and dedicate... less fungible.
I am lazy, and besides if I set money aside for this, I would worry if I still forgot that. So, all in a big pot it goes.

The one really BIG thing I could never think of was an illness that could have taken my life, but I luckily survived. After that, what's so important? Party on!
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Old 12-31-2014, 04:26 PM   #57
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YearTrinity %1st of Year %
20064.8%4.8%
20079.8%9.2%
20087.9%7.6%
20096.1%7.8%
20105.4%8.7%
20114.2%4.7%
20123.9%4.3%
20133.5%3.7%
20143.7%3.9%
20153.7%3.5%(budgeted)
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Old 12-31-2014, 04:30 PM   #58
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And I thought you said "Numbers is hard". Still saying it actually...

I guess when it comes to one's money, he cares more and it's no longer hard.
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Old 12-31-2014, 04:33 PM   #59
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I've been working on that table since 2006...
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Old 12-31-2014, 04:35 PM   #60
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YearTrinity %1st of Year %
20064.8%4.8%
20079.8%9.2%
20087.9%7.6%
20096.1%7.8%
20105.4%8.7%
20114.2%4.7%
20123.9%4.3%
20133.5%3.7%
20143.7%3.9%
20153.7%3.5%(budgeted)

REWahoo,
It looks like you started with a larger withdrawal rate, then declined--after SS or pension (or as a result of portfolio gains?)
I ask because I intend to withdraw at a higher rate until SS kicks in for both myself and DW, so I was curious about your experience, if this was the case for you. I'd like to draw 5-6%, then reduce to 4 and 3.5 after both of us start drawing SS.
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