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Old 05-29-2013, 03:01 AM   #21
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Originally Posted by Dwhit View Post
The role of pensions and SWR s are not usually included in SWR calculations,are they?

However, I am counting on SS, otherwise I would probably plan on something lower than 4.6%. The 4.6% was based on Firecalc with SS runs. This gets me in the 96% success category.
Studies that discuss SWR make it clear that the income you need from your portfolio is after subtracting pension and SS income from your expected annual need. Firecalc simply lets you model having SS and pension income among many other things.
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Old 05-30-2013, 02:53 AM   #22
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Said it before and I'll probably say it again. I've never used the SWR concept to "live by" (actually, slavishly pulling X.YZ% out of the port each year). Rather, I used it as a planning tool BEFORE retirement to see when I had enough to pull the trigger. I always assumed that once I had enough to comfortably live on about 4% or a little less, that I'd play the actual withdrawals by ear as events unfolded. That's what I've done in ER.

If your success in ER DEPENDS upon being able to (slavishly) pull a given amount (in the 4% range) out of your port (or else you starve or live in the street), I'd rethink the whole process. Too many variables, not enough data and heaven only knows the future. Keep telling yourself over and over, "IT'S ONLY A TOOL. IT'S ONLY A TOOL..." Of course, YMMV.
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Old 06-02-2013, 01:41 PM   #23
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When I run firecalc I put in SS of 70% of what my statements say it will be, then aim for a 95% success rate. I don't believe it won't be there, but I'm not certain it will be what they project it will.
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Old 06-05-2013, 03:06 PM   #24
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Originally Posted by Koolau View Post
Said it before and I'll probably say it again. I've never used the SWR concept to "live by" (actually, slavishly pulling X.YZ% out of the port each year). Rather, I used it as a planning tool BEFORE retirement to see when I had enough to pull the trigger. I always assumed that once I had enough to comfortably live on about 4% or a little less, that I'd play the actual withdrawals by ear as events unfolded. That's what I've done in ER.

If your success in ER DEPENDS upon being able to (slavishly) pull a given amount (in the 4% range) out of your port (or else you starve or live in the street), I'd rethink the whole process. Too many variables, not enough data and heaven only knows the future. Keep telling yourself over and over, "IT'S ONLY A TOOL. IT'S ONLY A TOOL..." Of course, YMMV.
Well said Koolau. I think this is what everyone does/will do in retirement also weather they admit it or not. KISS.
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Old 06-11-2013, 01:12 PM   #25
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Yep - pretty much what it comes down to! Flexibility in spending is probably the key to a successful early retirement if you are challenged with a run of "bad" years.
The problem is the models assume static behavior on the part of the human, when in fact, the human behavior is dynamic and iterative.....one can narrow in on a percentage amount that is a 'guideline.' It looks as though we have a fairly tight range to work with based on the models and tweaking. However, to assume there is only one number and the money spender will not change their consumption and/or withdrawal rate is naive.

As a previous poster said....it's just a TOOL. YMMV.
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Old 06-11-2013, 10:35 PM   #26
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Since Jan of this year, we use a 3% AWR using a port consisting of 65% equities + 35% cash (5yr CD ladder). We planned on a 40 year retirement from Jan 2013.

Our total expense ratio = 0.71% (expense ratio 0.07% + tax ratio 0.43% + hidden fees 0.21%).

The current net yield (interest + dividends) of our portfolio = 1.23%.
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Old 06-11-2013, 10:41 PM   #27
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to assume there is only one number and the money spender will not change their consumption and/or withdrawal rate is naive.
I don't know a single person that makes that assumption either on line or in the real world. Do you?
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Old 06-11-2013, 11:15 PM   #28
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Originally Posted by Koolau View Post
Said it before and I'll probably say it again. I've never used the SWR concept to "live by" (actually, slavishly pulling X.YZ% out of the port each year). Rather, I used it as a planning tool BEFORE retirement to see when I had enough to pull the trigger. I always assumed that once I had enough to comfortably live on about 4% or a little less, that I'd play the actual withdrawals by ear as events unfolded. That's what I've done in ER.

If your success in ER DEPENDS upon being able to (slavishly) pull a given amount (in the 4% range) out of your port (or else you starve or live in the street), I'd rethink the whole process. Too many variables, not enough data and heaven only knows the future. Keep telling yourself over and over, "IT'S ONLY A TOOL. IT'S ONLY A TOOL..." Of course, YMMV.
Apparently we both acquired the same "play book". Used the guides only as a tool. Being an engineer, threw in a safety variance.

Similar to steering a ship. It may look like a straight line from point A to point B, but you will make many steering adjustments along the way to keep on course. I wish you all smooth sailing.
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Old 06-16-2013, 06:44 PM   #29
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withdrawal rates have varied considerably over the years.

Does the 4% rule hold up? | Vanguard Blog
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Old 07-02-2013, 10:55 PM   #30
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I think the thing missing from many of these SWR discussions is that all the data are based on a 30 year retirement. Most of us here are probably planning on a 35, 40 or 45 year retirement. Is there any academic data on SWRs for these longer durations?
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Old 07-03-2013, 11:49 AM   #31
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I think the thing missing from many of these SWR discussions is that all the data are based on a 30 year retirement. Most of us here are probably planning on a 35, 40 or 45 year retirement. Is there any academic data on SWRs for these longer durations?
Yes, many of the studies go beyond 30 years. The SWR heads toward about 3% for the normal conditions. However, the end portfolio values are so varied that you have to question the value of demanding the precision of 40 years versus 30 years. Also, when using historical data, there are 10 less test scenarios (starting years) when looking at 40 years instead of 30 years.
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