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Old 07-15-2016, 04:02 AM   #61
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i consider them in the calculation as far as income but not value . so while the income from our two remaining co-op rentals counts the value of the apartments does not count in any calculation except estate taxes .
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Old 07-15-2016, 05:25 AM   #62
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Started out 5 years ago at 2.5% but have been forcing it up to ~3.3. As I'm a big fan of the Fido calculator, I use it as my guide and do a spreadsheet each month when I draw out my move, which is now up to $6k. I have a pension that is about the same.. I like the fido calc because is't premise is after tax, and since the bulk of our investment is IRA I let it figure out what the tax implications are on the portfolio.

I don't consider home or any other asset value. Just the liquid financial assets, pension, and SS to be taken at 70. Sort of anal in that the financial assets are ONLY to be accessed with that monthly take of $6k (and income tax); they move from the investment money pot to the credit union. When I do, check the WR and what Fido says is safe (I'm running about 80% given all sources). What happens is each month as we spend from the CU checking there's anywhere from $1k to $6k left over that moves to the CU savings. That account gets used for unexpected and large travel. Thanks to "large travel" the CU savings account got slashed from ~40k to ~20k this month so far and has some other pending hits.

This has been a system that works well for us. Yeah, the WR will likely leave a pile (not even sure what we'll do when SS comes in other than pay minimum withdrawal tax on IRA). We're working on that, which is why the WR has increased. However, $ has a certain intrinsic value to us having worked and saved all those years to accumulate it for a secure retirement. Now we look around and things/experiences sort of have to be WORTH what the dollars mean to us to make them enjoyable. Bought a $70k BMW for DW and internally I sort of roll my eyes at it. Nice car, but that's a lot of money. And neither kid needs the inheritance so by gosh we're trying to enjoy spending it! Definitely what one would call a first world problem.
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Old 07-15-2016, 05:31 AM   #63
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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)
Yes, agree. My withdrawal rate is certainly 3.95% but it is of the current market value of my portfolio, not some starting point 10 years ago. Since my portfolio is up about 60% since I retired 10 years ago the starting Firecalc SWR would be around 6-7% less inflation so maybe 5-6% on an inflation adjusted basis. If I were to run Firecalc now after 10 years of retirement, I think my success probability would be much higher than it would have been 10 years ago. A little surprising given the last 10 years have not been stellar as far as the market is concerned. I'd say I am past the most risky part of it. Currently 66
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Old 07-15-2016, 05:47 AM   #64
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Yes, agree. My withdrawal rate is certainly 3.95% but it is of the current market value of my portfolio, not some starting point 10 years ago. Since my portfolio is up about 60% since I retired 10 years ago the starting Firecalc SWR would be around 6-7% less inflation so maybe 5-6% on an inflation adjusted basis. If I were to run Firecalc now after 10 years of retirement, I think my success probability would be much higher than it would have been 10 years ago. A little surprising given the last 10 years have not been stellar as far as the market is concerned.
Agree. If I didn't count dividends and interest I'd be close to zero WR. Have also adjusted the % as the portfolio has grown a lot in the last 5 years. As we age (now 65) also realize that the % can increase unless you want the portfolio to grow or stay same. I'm fine if it stays same or grows. If it shrinks, eyebrows will raise.
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Old 07-15-2016, 06:38 AM   #65
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Retired mid-2014 and withdrawal was only 1%. Last year was bad since we moved and had a lot of expenses (especially since the bank was willing to loan us only $50K less than we wanted). Withdrew 3.8%. Likely to end this year at 3% and should be able to stay at or below 3% after that. Buying a car would put a cramp in it but we drive whatever we have till it falls apart and our 2 are still going strong.


There's a lot of fat in this; cutting back travel and charitable donations would make a big difference. I have yet to collect a $12K/year pension from a previous job, which kicks in in 1.5 years, and SS when I'm 70, in 6.5 years. We already get DH's SS and another pension of mine, which add up to $35K, so that helps the withdrawal rate,
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Old 07-15-2016, 06:43 AM   #66
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delaying ss we are at about 3.50% now , but at 70 that drops to around 2% so we are a whole lot less dependent on markets and sequence risk .

that allows us to spend more now earlier on .
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Old 07-15-2016, 06:54 AM   #67
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For a number of reasons similar to Gravity, my past 10 year withdrawals have been in the 1.5%-2% range but with a SWR of about 4%.

I wonder if anyone 'banks' the difference for later use. For example, if your SWR is 4% and one year you only take 1%, does anyone view that additional 3% as banked so that one year you might withdraw 7% and still be 'safe'?
Yes, I don't return unspent funds to the portfolio, so they are available to me at any time to spend. Next year or whenever.

For people who lump all their liquid assets together, this is harder to figure out. But I keep my short term accounts separate from my retirement account. So when I pull my X% withdrawal from my retirement account, the funds move into my short term accounts and stay there. In your example, I would pull the 4% out and put it in my short-term funds, and if I only spent 1/4 of it that year, the remainder of it is available for the next year.
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Old 07-15-2016, 07:00 AM   #68
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My conclusion after reading this thread is that most people (at least those willing to share their WR) are quite conservative in their withdrawals. Either your portfolios are fairly small and the WR not that material to your overall spending, or you are planning on leaving a large legacy by foregoing spending now?
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Old 07-15-2016, 07:01 AM   #69
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2012 3.29%
2013 3.86%
2014 3.15%
2015 2.94%

All calc'd by taking yearly spending / Portfolio value on 12/31 of previous year
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Old 07-15-2016, 07:04 AM   #70
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My conclusion after reading this thread is that most people (at least those willing to share their WR) are quite conservative in their withdrawals. Either your portfolios are fairly small and the WR not that material to your overall spending, or you are planning on leaving a large legacy by foregoing spending now?
it is just the way it happened to work out . we gave no thought to legacy money in our case .

we can generate safely 130-140k a year . we clocked in at 110k this year , it was our first year in retirement .

we live in queens in nyc so life isn't cheap
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Old 07-15-2016, 07:12 AM   #71
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it is just the way it happened to work out . we gave no thought to legacy money in our case .

we can generate safely 130-140k a year . we clocked in at 110k this year , it was our first year in retirement .

we live in queens in nyc so life isn't cheap
Right, in your case your WR is pretty close to the SWR and you have only been retired for a year. I can understand the lack of thinking about a legacy. What about others who have systematically spent less (sometimes significantly less) than the SWR over several years? Why? Just want to be super super safe? Don't want to spend more (ties into another thread about underspending)? Care about a legacy? Just don't think or care about any of it?
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Old 07-15-2016, 07:14 AM   #72
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over 90% of the time frames just drawing 4% as a swr has left you with more than you started . unless we have some pretty poor conditions legacy money is built in
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Old 07-15-2016, 07:19 AM   #73
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My conclusion after reading this thread is that most people (at least those willing to share their WR) are quite conservative in their withdrawals. Either your portfolios are fairly small and the WR not that material to your overall spending, or you are planning on leaving a large legacy by foregoing spending now?
Well the 2% and under have me scratching my head a bit. But I don't think I'd be able to bring myself to withdraw above 3.5% of remaining portfolio value until we are a bit older. Especially since we don't seem to spend it all anyway.
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Old 07-15-2016, 07:31 AM   #74
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My conclusion after reading this thread is that most people (at least those willing to share their WR) are quite conservative in their withdrawals. Either your portfolios are fairly small and the WR not that material to your overall spending, or you are planning on leaving a large legacy by foregoing spending now?
There is another explanation. From the many discussions here, my understanding of folks with 2% - 2.5% withdrawal rates is they saved a great deal, their lifestyle in retirement is conservative and not focused on consumption, just as it was during their work phase. They are risk averse and like to plan for the worst. Assets in the portfolio when they depart are not a goal, just an unavoidable consequence. There is no other way.
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Old 07-15-2016, 07:35 AM   #75
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Right, in your case your WR is pretty close to the SWR and you have only been retired for a year. I can understand the lack of thinking about a legacy. What about others who have systematically spent less (sometimes significantly less) than the SWR over several years? Why? Just want to be super super safe? Don't want to spend more (ties into another thread about underspending)? Care about a legacy? Just don't think or care about any of it?
I think in my case it's a simple matter of preferring not to see my portfolio drop. My entire focus while working was to grow it. It's hard to reverse that thinking even when spending from it. So the goal now seems to be to cover my expenses AND have more left over each year.

EDIT TO ADD: And what MichaelB said.
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Old 07-15-2016, 07:35 AM   #76
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I hate decumulating. From early on, the teaching was you do not liquidate and spend your income producing assets. That is financial suicide. Your job is to grow and maintain those assets. Spend some (but not all) of the income they produce.

RMD's are an unfortunate consequence of IRA rules. The inherited IRA is problematic in that the withdrawals need to anticipate future taxes. It makes tax sense to take more now to avoid much higher RMD's later. However, if I do not redeploy the pre-tax amount into other assets, I have not done my job of growing and preserving the assets.

So even the words "withdrawal rate" make me shudder...
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Old 07-15-2016, 07:44 AM   #77
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I hate decumulating. From early on, the teaching was you do not liquidate and spend your income producing assets. That is financial suicide. Your job is to grow and maintain those assets. Spend some (but not all) of the income they produce.

I have not done my job of growing and preserving the assets.

So even the words "withdrawal rate" make me shudder...
Right, I feel much the same way. Accordingly, I think a lot about the likely huge legacy we will leave. Do others also move on to this obvious next thought?
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Old 07-15-2016, 08:09 AM   #78
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What about others who have systematically spent less (sometimes significantly less) than the SWR over several years? Why? Just want to be super super safe? Don't want to spend more (ties into another thread about underspending)? Care about a legacy? Just don't think or care about any of it?
I am risk averse because I'm totally dependent on my own resources and don't wish to be deprived in old age. The consequence of portfolio failure will be poverty. There will be no magic pension fairy or relatives to rescue me. I cannot afford to screw this up. I'm acutely aware of the importance of the sequence of returns in the early years of retirement. I do expect to loosen the purse strings a little over time, especially if my portfolio increases. While I have a detailed estate plan, leaving a legacy is not a motivator for me.
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Old 07-15-2016, 08:18 AM   #79
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Year One: 2%
Year Two: 2.1%
Year Three: 2.1%
Year Four: 2.5%
Year Five: 2.75%

The first few years were about gaining confidence at living without a paycheck, so going in so conservatively assisted with the 'sleeping through the night' thing. By year four we finally began to feel confident enough to loosen up the reins a bit, so we bumped to 2.5%. Which is also when I posted here for the first time, out of concern that 2.5% was probably still too conservative given our age, assets, and the still-pending cashflow/assist additions of SS, pensions and Medicare. After gentle bootkicks from ER.org responders to my original thread, we bumped to 2.75%. Our original intent was to go to 3%, but with the recent market run ups, plus those two very recent and painful adjustments (the Dec/Jan gyrations, and the Brexit turmoil), we are happy and content with 2.75%, and will likely leave it there for the foreseeable future.

As other threads have mentioned again and again, since getting to FIRE was the result of decades of LBYM for many of us, stepping away from it afterward can be extremely difficult.



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Right, I feel much the same way. Accordingly, I think a lot about the likely huge legacy we will leave. Do others also move on to this obvious next thought?
Yes, absolutely, but it doesn't cause me to lie awake at night, so I'm (we're) OK with it. And if at some point we decide we want to chip away at it for some reason, then we will. We're just not there now, and that's fine.
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Old 07-15-2016, 08:20 AM   #80
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My yearly withdrawal has been at 3% . I calculate the 4% each year but I never spend that much and believe me I try . I did come close in 2009 after my portfolio took the big drop.
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