Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 07-21-2016, 09:15 AM   #161
Recycles dryer sheets
 
Join Date: Jun 2014
Posts: 433
I think it really depends on what you're using "SWR" for.

If it's for punching into firecalc to get to 100%... then you have to treat spending and assets considered the way firecalc does or that 100% is inaccurate.

So that's annual spending, adjust foe inflation divided by investable assets allocated the way you define (or it suggests).

Everything else can be added as inflation adjusted (or not) income and expenses.

I suspect most other retirement simulators are similar.

Stuff like side businesses, rental income, etc haven't been studied the same way (from what I know) so who knows.

I think this is important because if you use firecalc as a source of confidence for spending but then calculate your SWR in some other way or invest in some other way... it isn't really accurate. If you just do stuff like futz with firecalc's investment allocation, the success rates change DRAMATICALLY. Check out what happens at 20% vs 5% cash allocation... or going all small value.

That said I suspect almost no one will behave in real life the way firecalc models.

Once you go outside the studies I guess you can define your SWR however you like... but I'm not sure what that is useful for beyond an interesting general number.

I suspect that if someone generally spends only a small chunk of their investable assets, has reasonable allocation and responds to fluctuations, they will most likely be OK.

Similarly if someone has a bunch of rental income and a decent pension, they will probably be OK too.

I think probably equally important is being conscious of what is spent and flexible with what is needed.

From what I can see from responses people here seem like they'll be posting for many years to come.

Sent from my HTC One_M8 using Early Retirement Forum mobile app
__________________

__________________
petershk 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 07-21-2016, 01:27 PM   #162
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,357
A quick read through of this thread convinces me that almost everyone has their own definition of everything so naturally it is all good whatever it is.

Anyway, little matters until there is a big and lasting markdown of assets, or an expensive illness, legal problem, earthquake that destroys a home, etc,etc.

I think for our own peace of mind we tend to assume much greater stability than actually exists in the world.

Ha
__________________

__________________
haha is offline   Reply With Quote
Old 07-21-2016, 01:56 PM   #163
Full time employment: Posting here.
GravitySucks's Avatar
 
Join Date: Feb 2014
Location: Syracuse
Posts: 965
Quote:
Originally Posted by haha View Post
A quick read through of this thread convinces me that almost everyone has their own definition of everything so naturally it is all good whatever it is.



Anyway, little matters until there is a big and lasting markdown of assets, or an expensive illness, legal problem, earthquake that destroys a home, etc,etc.



I think for our own peace of mind we tend to assume much greater stability than actually exists in the world.



Ha

So true. Just thinking that a 60 year old has been alive for 1/4 of the time the US has been a country, and we use data from only half that time to decide what's enough. I doubt 1890 market data has any relevance to next years market, but I'm sure my 4% withdraw is conservative anyway.
No delusion as nice as self delusion.
__________________
“No, not rich. I am a poor man with money, which is not the same thing"
GravitySucks is offline   Reply With Quote
Old 07-21-2016, 02:03 PM   #164
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W
Posts: 5,859
The only WD that I have made so far was last year's RMD which I exchanged from my IRA to my taxable TSM account after deducting for federal income tax. Gotta love how those pension and SS income streams reduce the demands for additional income.
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Old 07-21-2016, 08:45 PM   #165
Recycles dryer sheets
 
Join Date: Jul 2015
Posts: 408
Quote:
Originally Posted by GravitySucks View Post
I got a feeling there are going to be many happy, happy heirs of this group.
Folks could have ER'd earlier!!
__________________
Living the dream...
FreeBear is offline   Reply With Quote
Old 07-21-2016, 09:04 PM   #166
Recycles dryer sheets
jfn111's Avatar
 
Join Date: Jan 2014
Location: Bloomington, MN
Posts: 203
Quote:
Originally Posted by GravitySucks View Post
I got a feeling there are going to be many happy, happy heirs of this group.
My wife feels this way. She would rather set up the kids than spend it herself.
__________________
jfn111 is offline   Reply With Quote
Old 07-21-2016, 09:55 PM   #167
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,253
Quote:
Originally Posted by FreeBear View Post
Folks could have ER'd earlier!!
We could have ERed earlier! If I'd known now what I knew then I would have optimized our spending earlier and left full-time work earlier. But much of our working years were pre-Internet so we didn't have access to all the simple living and sustainable living ideas we have found this last decade or so.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 07-21-2016, 11:09 PM   #168
Thinks s/he gets paid by the post
2017ish's Avatar
 
Join Date: Apr 2012
Posts: 1,814
Quote:
Originally Posted by GravitySucks View Post
I got a feeling there are going to be many happy, happy heirs of this group.
Yeah, the problem is that even if you spend classic Trinity 4%, odds are that you'll leave a stack. But that 5-15% possibility needs to be guarded against....
__________________
OMY * 3 2ish Done 7.28.17
2017ish is online now   Reply With Quote
Old 07-22-2016, 06:53 AM   #169
Recycles dryer sheets
DFA's Avatar
 
Join Date: Nov 2010
Location: Earth
Posts: 311
0% WR and will probably add to saving once all income streams come on line. So like many going to make someone' life better after we are gone.
__________________
DFA is offline   Reply With Quote
Old 07-22-2016, 09:10 AM   #170
Thinks s/he gets paid by the post
 
Join Date: Jun 2003
Location: Historic Florida
Posts: 1,568
For those who subscribe to the $2m is the new $1m as a retirement nest egg. I have a feeling a lot of those on this site do. Simply withdrawing ~$65k a year it will last 30 years. Add SS at 62/65 (or whatever) and folks should be golden assuming average lifestyles. Add in Interest/investment income or whatever and it gets even better. Personal pensions only add to that. COLA / inflation notwithstanding. I think inflation affects retired folk less than those w*rking to get there. We simply buy less, or factor it in when we do. We do not notice it honestly.


When we were doing our retirement goal setting we based the numbers on what we needed to live comfortably assuming 0 return. We also had a goal of accumulating equal portions of Tax Deferred and REAL Cash (Not subject to tax when used) so we could control our income and hence taxes.


The math just worked. I know it is contrary to a lot of beliefs, but it worked. At least for us and our situation and retirement desires.
__________________
"Arguing with an Engineer is like rolling in the mud with a pig. Just remember that the pig likes it."
ShokWaveRider is offline   Reply With Quote
Old 07-22-2016, 09:21 AM   #171
Full time employment: Posting here.
hankster's Avatar
 
Join Date: Jan 2008
Posts: 645
Thanks to all who have shared their withdrawal rate info on this thread. This has given me confidence in my own planning for retirement withdrawals.
__________________
"There is no dignity quite so impressive, and no independence quite so important, as living within your means." Calvin Coolidge
hankster is offline   Reply With Quote
Old 07-22-2016, 11:59 AM   #172
Thinks s/he gets paid by the post
 
Join Date: Jan 2008
Posts: 1,495
Quote:
Originally Posted by haha View Post
A quick read through of this thread convinces me that almost everyone has their own definition of everything so naturally it is all good whatever it is.

Anyway, little matters until there is a big and lasting markdown of assets, or an expensive illness, legal problem, earthquake that destroys a home, etc,etc.

I think for our own peace of mind we tend to assume much greater stability than actually exists in the world.

Ha
Good point.

Dirk Cotton has an excellent series of 8 recent blog posts on crafting an effective retirement plan. I highly recommend reading all posts in the series as he covers everything from risk to why retirees go broke, linking to some excellent sources in the process (I used his series as a review my own investment policy statement/retirement plan for completeness).

As part of the series, he discusses our lack of ability to predict the future:

The Retirement Café

Quote:
The exponential nature of societal change provides more evidence that predicting our financial situation 30 years or more into the future is a fool's errand. Let's face it – we have no more idea what life will be like in 2046 than we could foresee today in 1986. With exponential change, the next 30 years will see a lot more changes than the last 30.

Lastly, when you see computer output that appears to predict your wealth from age 65 to 95, make sure you understand precisely what you are seeing. It's a pro forma wealth statement that shows one example of what might happen. (If you want a chuckle, ask the provider for a guarantee.) This shouldn't be the central tenet of your retirement plan. If you base your retirement plan on your ability to predict the future, you are likely to be sorely disappointed.
__________________
Options is offline   Reply With Quote
Old 07-22-2016, 12:50 PM   #173
Full time employment: Posting here.
CaliforniaMan's Avatar
 
Join Date: Dec 2013
Location: San Diego
Posts: 838
About predicting the future. And this is very strange. I recently ran across a old Visual Basic program I wrote in 1989. It projected my future retirement assets to 2016, including my estimates for contributions, inflation, etc. In spite of all the changes in my life and my business since then, and all the mistakes I made along the way, it was correct to within about a 7% error.
__________________
Merrily, merrily, merrily, merrily,
Life is but a dream.
CaliforniaMan is online now   Reply With Quote
Old 07-22-2016, 03:51 PM   #174
Thinks s/he gets paid by the post
 
Join Date: Jan 2008
Posts: 1,495
Quote:
Originally Posted by CaliforniaMan View Post
About predicting the future. And this is very strange. I recently ran across a old Visual Basic program I wrote in 1989. It projected my future retirement assets to 2016, including my estimates for contributions, inflation, etc. In spite of all the changes in my life and my business since then, and all the mistakes I made along the way, it was correct to within about a 7% error.
Michael Kitces has a new thought-provoking post on goals-based investing:

https://www.kitces.com/blog/end-of-h...sed-investing/

Quote:

...research suggests that we’re not actually very good at figuring out what our future goals will be. The fundamental challenge is that, despite recognizing how much we change over time (think back on how different you were 5, 10, or 20 years ago!), we just don’t know how to envision the ways we’ll be different in the future. In fact, researchers have dubbed the phenomenon the “End Of History Illusion” – we just don’t know how to project a future that’s any different than the today (which is the end of our personal history as we know it).

From the perspective of financial planning, and the rising popularity of goals-based investing, the challenge of the End Of History Illusion is that we may be encouraging retirees to save towards a vision of retirement that they won’t actually care about when retirement comes. This doesn’t mean that retirement itself won’t be relevant, but that vision of a particular retirement home, vacations, a boat on the lake, or a certain lifestyle, may not actually be very desirable when the time comes.
This to me impacts one's thought process regarding saving for and spending in retirement as it relates to predictions. For example, I just read somewhere (but have now forgotten where , I think it was a link in the Dirk Cotton posts) that most people stop international travel around age 70, stop domestic travel around age 80, and stop travelling beyond their back yard (if that) at age 90. It also stated that for most people discretionary spending declines approximately 1.5% per year throughout retirement. As our needs are few and are wants are many, assuming we'll have the same wants as today and budgeting accordingly throughout retirement may not be wise. OTOH, the excess could be thought of as "padding" or legacy use, if desired.
__________________
Options is offline   Reply With Quote
Old 07-22-2016, 05:19 PM   #175
Full time employment: Posting here.
hankster's Avatar
 
Join Date: Jan 2008
Posts: 645
Quote:
Originally Posted by Options View Post
Michael Kitces has a new thought-provoking post on goals-based investing:

https://www.kitces.com/blog/end-of-h...sed-investing/



This to me impacts one's thought process regarding saving for and spending in retirement as it relates to predictions. For example, I just read somewhere (but have now forgotten where , I think it was a link in the Dirk Cotton posts) that most people stop international travel around age 70, stop domestic travel around age 80, and stop travelling beyond their back yard (if that) at age 90. It also stated that for most people discretionary spending declines approximately 1.5% per year throughout retirement. As our needs are few and are wants are many, assuming we'll have the same wants as today and budgeting accordingly throughout retirement may not be wise. OTOH, the excess could be thought of as "padding" or legacy use, if desired.
So true! At age 58 and on the verge of retirement, I already find myself having less desire for long distance travel. Five years ago I thought it would be a major component of our retirement activity. Simpler and closer to home activities are certain to make it all more affordable too.
__________________
"There is no dignity quite so impressive, and no independence quite so important, as living within your means." Calvin Coolidge
hankster is offline   Reply With Quote
Old 07-23-2016, 10:20 AM   #176
Full time employment: Posting here.
GTFan's Avatar
 
Join Date: Apr 2013
Location: Atlanta
Posts: 630
Quote:
Originally Posted by ShokWaveRider View Post
For those who subscribe to the $2m is the new $1m as a retirement nest egg. I have a feeling a lot of those on this site do. Simply withdrawing ~$65k a year it will last 30 years. Add SS at 62/65 (or whatever) and folks should be golden assuming average lifestyles.
LOL, I'd never want to wait that long. Hell I don't even spend enough to need $1m at this point, could have retired years earlier but left the first year I was eligible for a MegaCorp ER parachute. Well that and the ACA going into place.

It's too easy to only need $1m (or less) if you're LBYM, live in a low-cost area and everything's paid for. And we still take nice vacations, go out to eat and buy whatever we want, which isn't much (it helps to play the credit card bonus game, do some couponing and hunt deals etc - we don't pay for flights or hotels and groceries are generally about 40% off of retail.).

Spending $2k a month is an extravagance for us.
__________________
GTFan is offline   Reply With Quote
Old 07-23-2016, 11:04 AM   #177
Recycles dryer sheets
 
Join Date: Apr 2012
Location: Birmingham, AL
Posts: 189
WR is based on a percentage of investable assets at the beginning of the year. I retired in 2012 and began withdrawing in 2013.

2013 2.6%
2014 4%
2015 3.7%
2016 4% (Planned)
__________________
Greg V is offline   Reply With Quote
Old 07-23-2016, 11:36 AM   #178
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Posts: 1,615
Quote:
Originally Posted by Ronstar View Post
I don't know about others, but spending more money just isn't as fun as it was when we were younger.
There is the problem. We all should have stayed younger longer!
__________________
bingybear is offline   Reply With Quote
Old 07-23-2016, 12:09 PM   #179
Thinks s/he gets paid by the post
redduck's Avatar
 
Join Date: Mar 2005
Location: yonder
Posts: 2,050
Year: WR

2014: not sure
2015: no idea
2016: to be undetermined
__________________
Carpe cōleī
redduck is offline   Reply With Quote
Old 07-23-2016, 01:22 PM   #180
Thinks s/he gets paid by the post
 
Join Date: Jun 2003
Location: Historic Florida
Posts: 1,568
Quote:
Originally Posted by redduck View Post
Year: WR

2014: not sure
2015: no idea
2016: to be undetermined
LOL, Translation, We take what we need when we need it!
__________________

__________________
"Arguing with an Engineer is like rolling in the mud with a pig. Just remember that the pig likes it."
ShokWaveRider 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 10:53 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.