Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 07-14-2016, 04:30 PM   #21
Recycles dryer sheets
SteveNU's Avatar
 
Join Date: Feb 2010
Posts: 270
Semi Retired in 2013 and fully retired this year. Right now pension covers about 60% of our expenses.

2013 0%
2014 0%
2015 1.8%
2016 7.5% (home renovations)
2017 - 2018 should be in the 6-8% range and then as my SS comes online it should drop down to near zero. The wife's SS follows about 4 years later and will give us even more of a cushion.

Sent from my Nexus 6P using Early Retirement Forum mobile app
__________________

__________________
SteveNU is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-14-2016, 04:49 PM   #22
Dryer sheet wannabe
 
Join Date: Dec 2015
Location: Sandy
Posts: 24
6+ months in and no withdrawals. Hoping to make it one year, but it'll be close with a last kid's tuition bill due in the Fall. One more of those payment left next year. Glad to report there has been no substantial change in lifestyle, and living within reduced retirement income. Plenty of free things to enjoy and doing most of the handyman fixes and improvements myself. Used frequent flyer miles and credits for 4 out of state flights so far (two with DW), but those won't last forever....three of those flights to help mom move to senior living and sell her house, one for a well deserved cruise.
__________________

__________________
Free is offline   Reply With Quote
Old 07-14-2016, 04:53 PM   #23
Thinks s/he gets paid by the post
 
Join Date: Dec 2009
Location: Alberta/Ontario/ Arizona
Posts: 2,337
Quote:
Originally Posted by marko View Post
My SWR is quite a bit below my dividend income; Firecalc says I'd only have a 60% chance of success if I spent them all each year.

As mathjack continues to lecture, dividends are not the same as interest.
Yes, I understand your point, but I am confident I will not run out of money. Been retired 10 years and portfolio is way up.
__________________
Danmar is offline   Reply With Quote
Old 07-14-2016, 05:05 PM   #24
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Posts: 1,114
several people noting they are withdrawing very little or 0. Just curious what you are living on.
Is this cash on the side that you don't see as part of your investments?
Is this rental income?
Is this SS or pension? (some noted this)
Is this dividend or interest?
Is this an annuity purchased with your investments/retirement $?

Just curious how 0 is obtained.
__________________
“Remember where you came from, where you're going, and why you created this mess you got yourself into in the first place.”
― Richard Bach, Illusions
bingybear is offline   Reply With Quote
Old 07-14-2016, 05:09 PM   #25
Thinks s/he gets paid by the post
RobbieB's Avatar
 
Join Date: Mar 2016
Location: Central CA
Posts: 1,585
For me, dividends & interest, SS and capitol gains.
__________________
Retired at 59 in 2014. Should have done it sooner but I worried too much.
RobbieB is offline   Reply With Quote
Old 07-14-2016, 05:26 PM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 13,585
Quote:
Originally Posted by RobbieB View Post
For me, dividends & interest, SS and capitol gains.
Dividends, interest, and capital gains harvested all count as money withdrawn from a portfolio.
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is offline   Reply With Quote
Old 07-14-2016, 05:32 PM   #27
Thinks s/he gets paid by the post
RobbieB's Avatar
 
Join Date: Mar 2016
Location: Central CA
Posts: 1,585
I'm not withdrawing anything from the bag, just living off cash in the bank paying milli-percent. The dividends are all being re-invested. When I've done the net worth calculation it doesn't change.

Therefor I find that I've lived the last 2 years with zero impact on my net worth. The way the market is going this year me thinks I'll find I made dough.

IE, the cash in the bank is getting smaller but the investments are getting bigger with a net zero.
__________________
Retired at 59 in 2014. Should have done it sooner but I worried too much.
RobbieB is offline   Reply With Quote
Old 07-14-2016, 05:49 PM   #28
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 35,759
My planned withdrawal rate has always been 3.5%. It still is.

Method: I do not use the SWR method (where you take 3.5%, then increase for inflation each year). Instead, my withdrawal is 3.5% of the actual value of my portfolio on 12/31 of the prior year.

(To clarify after reading the next few pages of this thread, my portfolio consists of mutual funds at Vanguard and the TSP, as well as cash in a money market fund, and nothing else. Withdrawal rate percentages only refer to the percentage of my portfolio that I withdraw from it and spend each year. They have nothing whatsoever to do with other income sources such as SS and my tiny pension, or possessions such as my paid off home.)

So far, here is the reality of what I have withdrawn from my portfolio each year and spent:

2010: 2.61%
2011: 1.98%
2012: 2.12%
2013: 2.40%
2014: 1.70%
2015: 8.64% (1.72%, +6.92% Dream House)

The 6.92% for the Dream House covers the difference in what I paid in cash for my Dream House less what I received in cash for my prior house. It also covers repairs of my old house that the buyers required, the cost of movers, the cost of fixing up my new house, the extra cost of maintaining two houses vs one house for a couple of months, and closing costs. It also covers extensive landscaping work done on my new house that was done in January-February 2016.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harborless immensities.
- - H. Melville, 1851.

W2R is offline   Reply With Quote
Old 07-14-2016, 05:51 PM   #29
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Posts: 1,114
Quote:
Originally Posted by RobbieB View Post
I'm not withdrawing anything from the bag, just living off cash in the bank paying milli-percent. The dividends are all being re-invested. When I've done the net worth calculation it doesn't change.

Therefor I find that I've lived the last 2 years with zero impact on my net worth. The way the market is going this year me thinks I'll find I made dough.
I guess my question may not have been well defined. I think the topic was "actual withdraw rates". I assumed this to be withdraw rates that FIRECALC or Fido RIP might calculate or be derived from these calculations. In my narrow view money from income streams like SS or a pension would not count as withdraw from assets (thus withdraw rate). However, rents, interest, dividends and capital gains that are used for living expenses (not reinvested) would be considered in the withdraw rate.

I think the above follows the concepts in the retirement planners and retirement planning in terms of withdraw rates.
__________________
“Remember where you came from, where you're going, and why you created this mess you got yourself into in the first place.”
― Richard Bach, Illusions
bingybear is offline   Reply With Quote
Old 07-14-2016, 05:54 PM   #30
Full time employment: Posting here.
 
Join Date: Jan 2013
Posts: 666
If dividends and interest are part of the portfolio (not disagreeing), what is rental income?

This is why to me it is difficult to accept the total return approach. If I spend only dividends, interest, and rental income, my ownership of these assets remains. Next year, they are still in the portfolio, producing income for me. If I sell shares, cash in CD's or bonds, or sell a rental, the sources of the income are gone.
__________________
Another Reader is offline   Reply With Quote
Old 07-14-2016, 06:21 PM   #31
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 7,273
Year 1 - 2014 (only 6 months retired): 4.1%
Year 2 - 2015: 2.9%
Year 3 - 2016(planned): 2.7%

Year 3 is the current year. I withdraw money each quarter - and plan to withdraw the same amount for the 4th quarter that I withdrew for the previous 3.

Year 1, I was only retired for 6 months of it - but pulled out extra money to cover the trip-of-a-lifetime planned for year 2. I wanted the money set aside and ready to guarantee I'd be able to keep my income low in year 2 for ACA insurance. Some of the money was pulled from an inherited IRA - so it counted as income/taxable.

We might pop the WR up to 3-4% next year since we're pondering a trip to Asia with the kids... But DH goes on medicare next year - so those savings may allow us to keep the WR under 3%.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
rodi is offline   Reply With Quote
Old 07-14-2016, 06:21 PM   #32
Thinks s/he gets paid by the post
RobbieB's Avatar
 
Join Date: Mar 2016
Location: Central CA
Posts: 1,585
Maybe I'm wrong in thinking the way I do, but to me at least if my net worth does not change then I haven't spent anything "down".

I only do this calculation once a year (at tax time) when I see what the whole cash flow situation is also.
__________________
Retired at 59 in 2014. Should have done it sooner but I worried too much.
RobbieB is offline   Reply With Quote
Old 07-14-2016, 06:34 PM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 9,949
Quote:
Originally Posted by RobbieB View Post
Maybe I'm wrong in thinking the way I do, but to me at least if my net worth does not change then I haven't spent anything "down".
I'm afraid you are indeed wrong. Or, more tactfully, you are mixing two different concepts.
__________________
Meadbh is offline   Reply With Quote
Old 07-14-2016, 06:35 PM   #34
Recycles dryer sheets
 
Join Date: Mar 2014
Posts: 65
Quote:
Originally Posted by Another Reader View Post
If dividends and interest are part of the portfolio (not disagreeing), what is rental income?

This is why to me it is difficult to accept the total return approach. If I spend only dividends, interest, and rental income, my ownership of these assets remains. Next year, they are still in the portfolio, producing income for me. If I sell shares, cash in CD's or bonds, or sell a rental, the sources of the income are gone.
It is all about inflation adjusting the assets. So
rental income = spend it all since your asset is already inflation protected.
interest income = only spend (interest - inflation*principle)
dividends = tricky since some CEOs can be devaluing the company while some company can be preserving the value. I would only spend 50% of the dividends and re-invest other 50%.
__________________
pjigar is offline   Reply With Quote
Old 07-14-2016, 06:37 PM   #35
Recycles dryer sheets
lemming's Avatar
 
Join Date: May 2008
Posts: 384
Quote:
Originally Posted by Danmar View Post
Just spend divs. Current yield is about 3.95%
I think dividends count in the percentage so your rate is 3.95%
I also think that firecalc assumptions are based on your beginning balance not current year. So my 2009 first year balance was pretty low and the first 5 years my not so safe withdrawals were over 6% but the balances still went up. Once social security gave me a cushion I am taking taxable dividends and other income for a 2.8% withdrawal rate. Happy until I go through a 20/30% market drop. ( I do have 2 years in cd's)
__________________
lemming is offline   Reply With Quote
Old 07-14-2016, 06:44 PM   #36
Thinks s/he gets paid by the post
RobbieB's Avatar
 
Join Date: Mar 2016
Location: Central CA
Posts: 1,585
Quote:
Originally Posted by Meadbh View Post
I'm afraid you are indeed wrong. Or, more tactfully, you are mixing two different concepts.
This must be a "semantic" thing. I hear people talking about a 4% withdrawal rate as being "safe", ie your dough should last ~30 years.

If you are making 4% then there is no question, your dough will last forever.

What am I missing?
__________________
Retired at 59 in 2014. Should have done it sooner but I worried too much.
RobbieB is offline   Reply With Quote
Old 07-14-2016, 06:46 PM   #37
Dryer sheet wannabe
 
Join Date: Dec 2015
Location: Sandy
Posts: 24
Quote:
Originally Posted by bingybear View Post
several people noting they are withdrawing very little or 0. Just curious what you are living on.
Is this cash on the side that you don't see as part of your investments?
Is this rental income?
Is this SS or pension? (some noted this)
Is this dividend or interest?
Is this an annuity purchased with your investments/retirement $?

Just curious how 0 is obtained.
Six months in, so I may not be a good representation of others. But, I've been spending down the "float" in our accounts or the amount of cushion in checking/savings, etc., before we get to a month to month situation. Additionally for us DW still works part time, retiree health care is taken care of an I have a small "temporary" pension of about $30,000 for 5 years. I anticipate we'll be drawing about 2% annually out of our true retirement funds beginning next year, but we may make it on a bit less. I think it will change over time. We'll wait until 66+ to draw SS and probably be hit by pretty high RMW at 71. We'll need to do some serious calculations before then to determine the best way to minimize the tax hit on the RMW's.

Thank you for the question. I find it very interesting to see how others are doing in this area.
__________________
Free is offline   Reply With Quote
Old 07-14-2016, 06:48 PM   #38
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 39,809
Quote:
Originally Posted by RobbieB View Post
...I hear people talking about a 4% withdrawal rate as being "safe", ie your dough should last ~30 years.

If you are making 4% then there is no question, your dough will last forever.

What am I missing?
That sounds like a good question for your financial advisor. Make him earn his money!
__________________
Numbers is hard.

Retired in 2005 at age 58, no pension

REWahoo is offline   Reply With Quote
Old 07-14-2016, 06:49 PM   #39
Full time employment: Posting here.
GravitySucks's Avatar
 
Join Date: Feb 2014
Location: Syracuse
Posts: 551
Quote:
Originally Posted by bingybear View Post
several people noting they are withdrawing very little or 0. Just curious what you are living on.

Is this cash on the side that you don't see as part of your investments?

Is this rental income?

Is this SS or pension? (some noted this)

Is this dividend or interest?

Is this an annuity purchased with your investments/retirement $?



Just curious how 0 is obtained.

Mine was cash outside retirement savings.
__________________
“No, not rich. I am a poor man with money, which is not the same thing"
GravitySucks is offline   Reply With Quote
Old 07-14-2016, 07:05 PM   #40
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 13,585
Quote:
Originally Posted by RobbieB View Post
I'm not withdrawing anything from the bag, just living off cash in the bank paying milli-percent. The dividends are all being re-invested. When I've done the net worth calculation it doesn't change.

Therefor I find that I've lived the last 2 years with zero impact on my net worth. The way the market is going this year me thinks I'll find I made dough.

IE, the cash in the bank is getting smaller but the investments are getting bigger with a net zero.
It depends on whether or not you count that cash as part of your portfolio. If not, then I agree 0 withdrawal.

But a retirement portfolio should grow, hopefully (especially in the first half of retirement), to counter inflation and have enough built up to smooth out the down years. Just because a portfolio increases enough to cover the withdrawal in a given year doesn't mean your withdrawal rate was zero.
__________________

__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Calculating actual withdrawal rates David1961 Life after FIRE 9 05-02-2013 04:25 PM
withdraw rates graph mmcc FIRE and Money 22 12-18-2009 04:58 PM
Observations on "Actual Average ROI" poll Sam FIRE and Money 31 05-04-2006 01:26 PM
Actual Money # savings nnkrealtor FIRE and Money 22 02-13-2006 06:29 PM
Social Security estimate now vs. actual Telly FIRE and Money 8 05-15-2003 03:56 PM

 

 
All times are GMT -6. The time now is 02:37 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.