61 and getting closer, a question on withdraw...does it pain you?

[Floridatennisplayer]

Planning on retiring in a few more years. However, after years and years of contributing into retirement accounts, the thought of doing withdrawals even thought the right thing, seems painful to me.

SS will cover the majority of my expenses and I'll have to withdraw some cash out which is already bugging me. I guess I have been conditioned to NEVER TOUCH THAT is still in my head, even though that's what it's designed for. I hate the thought of DEPLETION.

Any of you struggle with this reversal in processes? Just curious. And all the calculators give me the green light, FYI.

Thanks.

 

[Nemo2]

....been conditioned to NEVER TOUCH THAT is still in my head, even though that's what it's designed for. I hate the thought of DEPLETION.

DW & I live off less than our government pensions, (not government pensions as in former government employees), dividends and interest income brings in.

We, neither of us, have any desire to touch 'The Nut', and couldn't care less if friends relatives get it after we're gone......we're quite happy with the current status quo.

 

[Sunset]

Just kinda going through this thought process as well since there are multiple accounts it's a little less obvious.
So I'm making a spreadsheet of each account and the total dividends paid last year in IRA's (they don't show on tax return).

Then I can see how short we will be after dividends and interest are counted.

 

[W2R]

I don't feel bad about withdrawing. After all, I'm following my plan, just as I did during the accumulation phase. Creating a plan, implementing it, and then following through and watching it succeed, is a lot of fun.

That said, generally I withdraw less than my dividends. Since my retirement in 2009, I have averaged 2% - - except that last year I bought a house. Yikes! Can't do THAT every year. Happily, my projected spending for this year looks like it will be back to 2.x%.

Also, the bull market in recent years helps. My nest egg keeps increasing.

 

[Ronstar]

I've only been retired 2.33 years and my portfolio balance now is more than I retired. That's led to my acceptance of the withdrawal phase so far. But I'll struggle with it once the bear market hits.

 

[RetireAge50]

Have not started yet but portfolio depletion is part of my plan:

 

[Options]

I've only been retired 2.33 years and my portfolio balance now is more than I retired. That's led to my acceptance of the withdrawal phase so far. But I'll struggle with it once the bear market hits.

This

 

[nanannjen]

It REALLY bothered me for the first year or two - but I did finally get used to it! After so many years of counting every penny and saving, saving, saving, to start withdrawing was hard for me. But now - it's just where I go to get my money!

 

[bingybear]

We have been RE for about 1.5 years. Not really seeing the depletion yet. However, we don't plan on SS for 15 years and there are no pensions. So I expect we will be taking from the nest egg. If it looks like it is going faster than I think it should.... yeah, that will bother me. So far... so good. Not much a fan of down markets as that increases the draw down

 

[UpAnchor]

It REALLY bothered me for the first year or two - but I did finally get used to it! After so many years of counting every penny and saving, saving, saving, to start withdrawing was hard for me. But now - it's just where I go to get my money!

Upon semi-retiring a few years ago I set in place the mechanisms for transfers from retirement portfolio to MM and monthly withdrawals from MM to checking to serve as my retirement "paycheck".

As I began working progressively fewer hours I decided to "flip the levers" to start the cash flow but with modest amounts. As I head into full retirement this month I need only go online and increase those amounts.

Getting the process set up early-on and getting use to watching small amounts be regularly drawn from the portfolio should reduce the pucker factor once I'm dependent upon them as a more substantial portion of our retirement income stream. Or that's my hope anyway.

 

[REWahoo]

I felt no pain in beginning the withdrawal phase - at least not compared to the pain of working.

 

[W2R]

I felt no pain in beginning the withdrawal phase - at least not compared to the pain of working.

Give that man a silvah dollah! That was a great answer.

 

[brucethebroker]

Nice problem to have though, right?

 

[DrRoy]

I have also been a strong saver/investor for 35 years and generally a very tight spender. I understand the difficulty that you having, but I do not seem to share it. Having a financially secure retirement is what it was all about, right? Why do all that work for all those years and never benefit from using the money? I am going to RE next spring, and will only need a 1.5% WR. I am already starting to use the money on travel. So go ahead and spend some. You earned it.

 

[athena53]

I retired 2 years ago at 61 and it still bothers me, even though our net worth is higher now than it was when I retired. That should happen, of course, if you're leaving enough in the pot to grow so that you can keep up with inflation. What I find really annoying is that when the market drops, I can't look forward to new money being invested at bargain prices! Two things help me.


One is keeping the withdrawal rate under 4%. We're averaging 3.5% but that will go down. We had an expensive year due to downsizing and relocation costs, and I'm not collecting SS yet.


The other is monitoring our expenses by category. Two huge items are travel and charity; both can be cut if things get lean.


I've also got a long-term spreadsheet with assumptions about inflation and investment income so I can track against that. I used the same format pre-retirement but it had a savings component. Although the last year was bad due to moving expenses and lower-than-average returns, it still shows me being a rich old lady at 90, even when adjusted for inflation.

 

[Youngster]

I don't think I will have any issues withdrawing when I turn 59 1/2 (59 soon). Actually, I intend to take ss at 62 so until then my withdrawals should put me in a lesser tax condition than after starting ss, I think.

 

[lem1955]

I left my big job in 2011 and stopped contributing large amounts to my 401(k). It was a step away from building the portfolio and a step closer to withdrawal. It made quitting the workforce and beginning withdrawals easier. Withdrawal at 3.6% of total portfolio is my plan. I wouldn't have enough cash to meet my needs if I didn't. I will take SS at 70 and even if my portfolio decreases by 20% between now and 2025, I think that will be the better decision for me. So far, my portfolio has been hanging steady.

 

[jerryo]

I haven't really been worrying about it since (semi-) retiring at 62 about 5 years ago. And, with the market booming, some p/t work, and my wife working up to last year, our holdings have actually grown substantially.... But, since most of our assets are in retirement accounts, I guess MRDs will soon start solving the problem for us (unless we just reinvest these, as well)!

 

[misshathaway]

I retired last October at 58. That was about the time the stock market had a "moment". Even though every analysis was green and I'm not even withdrawing from investments yet, only from savings, I freaked out. I immediately cut everything to poverty level, got a part-time job that I hated, and worried.

Good thing I like spreadsheets and analysis. They show that my net worth increased every month, even during the down market. My asset allocation is 50/50.

I still get a twinge when paying bills, but it's not like it was initially. I quit the part time job and am not anxious about finances any more.

One thing that really helped me initially was having my Vanguard advisor look over the portfolio and help me set it up for the retirement phase. Before that I kept thinking "What if I did the numbers wrong? What if there is some huge iceberg I didn't take into consideration?" BTW a one-time advisor lookover is free. I already knew I wanted to avoid managed funds and he didn't suggest any anyway.

 

[GravitySucks]

First couple of withdrawals were scary, luckily the portfolio has caught up and grew larger than the withdrawal. I know that's not going to always happen, but it will more often than not.
Now my problem is that the market always seems to dip a bit right when I need to pull some cash for living expenses. That and not being a buyer makes dips painful where they used to be happy time.

 

[LARS]

Well for what it's worth, the first twenty years flew by. The next 30 to 35 we will have to see. No question with the macroeconomic world in the state it is in there will be challenges. The offset to that will be the icing of finally receiving SS (hopefully: never know with class warfare rhetoric). And lest I forget that the event horizon (i.e. death) keeps creeping forward with each passing year so the pile doesn't have to survive as long...


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[Trawler]

I understand how you feel it was tough the first couple years as always saved never went to savings for many years and switching gears was tough until a light bulb went off in my head. First we always saved for retirement and building golden goose was top priority and I think for me I really got more enjoyment watching the goose get fat than buying stuff. So now we live off the eggs. The light bulb was it is no longer about how much bigger the goose gets it now top priority how many eggs can we harvest without killing the goose. It have helped that with almost four years of FIRED the market has been good and the goose is fatter than when we started and we are living the way we want. I will say I am a bit of a timer for withdraws as only replenish the egg basket to cover 4 years at new net worth highs.

 

[kcowan]

We have been retired for 14 years and the "Nut" keeps growing, so we are taking baby steps to get into real withdrawal. Charitable donations increasing, gifting to kids and grandkids. Memorials for friends who have passed prematurely.

 

[Diver]

As a new retiree this year, I found it unnerving to make withdrawals from our after tax savings for living expenses as we perpetual travel. However, thanks to Wellington (all our tax deferred is there), Synchrony for our after tax, Quicken, DH's spreadsheets, FIDO, Financial Engines, and Firecalc, I am reassured as I see that our net worth continues to grow and the calculators say we are good. That has helped my nerves alot. DH trusts his spreadsheets, so he does not need the reassurance I do. Also, we are tracking all of our expenses in detail in a separate spreadsheet (so no cash goes uncategorized) and so far our total monthly expenses are under budget, maybe partly because we know we are tracking everything! That is also reassuring, because we are having fun at this spending level and could cut back if necessary. I do have to say that the reassurance and good advice I received from this forum last year as we were making plans was invaluable. Because of that, we now have Roth conversions in our plan starting this year, since we are in living on post tax money.

Since selling our US home in January, we have had a blast traveling all around SE Asia (Thailand, Vietnam, Myanmar, Hong Kong, Singapore, Indonesia), Amsterdam, Prague, Budapest, and heading next to South America. We are fulfilling a long time dream, and it has been a wonderful experience.

The market YTD has helped us relax a bit about this spending phase. For me seeing our net worth rise this year was the clincher. Hopefully this will help us hang on in a bad market, because it is inevitable that there will be down times. We have about 3-4 years of living expenses out of the market to help ease my nerves, and have vowed to stay in Wellington and just ride out any storms in tax deferred.

Our plan seems to be working, but it is early. I hope in a few more years to be even more relaxed about the spending phase. Not quite there yet, but the travel excitement helps takes the edge off!

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[Frankie1926]

Upon semi-retiring a few years ago I set in place the mechanisms for transfers from retirement portfolio to MM and monthly withdrawals from MM to checking to serve as my retirement "paycheck".

As I began working progressively fewer hours I decided to "flip the levers" to start the cash flow but with modest amounts. As I head into full retirement this month I need only go online and increase those amounts.

Getting the process set up early-on and getting use to watching small amounts be regularly drawn from the portfolio should reduce the pucker factor once I'm dependent upon them as a more substantial portion of our retirement income stream. Or that's my hope anyway.

This worked for me also.


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