7% SWR (non-inflation protected)

[newellcr]

Hello Folks,

I was just finishing up a Kiplinger magazine and found this article, http://www.kiplinger.com/magazine/ar...tirement2.html. It's an interesting twist on the SWR concept. In the article Phillip Cooley suggests that retirees think about taking more of their lump up front because most folks want to have more cash in their younger years. He suggests those who can accept a little more uncertainty might want to start with a 7% annual withdraw from their lump. The catch is that this figure isn't inflation protected. The article includes a comparison to the widely quoted 4% SWR.

I think the 7% rate is interesting in a couple of ways. It allows retirees more upfront cash, when most want to spend it. Also, it may not hurt the retiree because there are many runs of the 4% SWR that leave the account growing. That begs the question of how much spending power is lost over time. I wonder how many folks would like to rub the rabbits foot and take the 7%?

Cheers,

Chris