Best sites about WR for early retirees

[DEC-1982]

But the 4% rule is 4% the first year and is assumed to increase with inflation each year, right, and that's based on the initial value of the nest egg without yearly re-evaluations? Or did I read the Trinity Study all wrong?

Has a strict perpetual 4% rule been tested? Because my spending isn't anything near what COLA increases say they should be, and that's going back through 12 years of tracking finances.

This article (link below) seems to indicate that the Perpetual Withdrawal Rate (PWR) is around 3.5%, although I have read other articles which say it is around 3%.

https://portfoliocharts.com/2016/12...al-rates-are-the-runway-to-a-long-retirement/

 

[timemoveson]

I have always found Mr. Money Mustache's take on SWR very clear: The 4% Rule: The Easy Answer to “How Much Do I Need for Retirement?”

The whole post is worthwhile reading, but specifically related to the topic of retirement duration there is a relevant passage:



YMMV of course, but it is still one of the best analysis I've seen on the topic.

+100 on this. I think his analysis and perspective is right on for those using a total return/withdrawal strategy.

 

[CaptTom]

You never know.
Jeanne Calment lived on her own until 110, then moved into a nursing home for more than another decade. Her health remained tolerably good until 121.

People also win the lottery. I'm not going to include that in my retirement plan, either.

I just don't see the need to arrive at death with all my assets intact. Or even any value in doing so.

I'm not against the idea of a PWR or leaving as much of an inheritance as possible. If that's your goal, go for it. It's just not my choice.

 

[Tailgate]

no one lives "30 years" or "35 years" or "20 years"; a little piece of us dies each year until we are 100% dead

love this quote..I'm stealin' it

 

[Big_Hitter]

love this quote..I'm stealin' it

well it's true - that's how the force of mortality works

https://en.wikipedia.org/wiki/Force_of_mortality

maybe I should get a vanity place for the scoob that says "mux"

 

[LOL!]

wow, I thought these were gems...not one comment...hmmm.

Your first link had its own 6-page thread a short while ago:

http://www.early-retirement.org/forums/f28/swr-another-6-5-million-calculations-84814.html

 

[Lsbcal]

I'm sorry, I'm not trusting my retirement to a guy who looks like this:

Yep. And most of these studies are probably done by people who are not personally into retirement yet. Some come out with multiple studies ... an endless paper mill to keep up with.

I like the idea of an open spreadsheet that I can poke around in and check the math and assumptions. Might even customize the spreadsheet for myself. Then the mistakes will be mine. But what the heck, I'm in the drivers seat for better or worse.

 

[Major Tom]

no one lives "30 years" or "35 years" or "20 years"; a little piece of us dies each year until we are 100% dead

I understand the context in which you said this but taken as a stand-alone statement, that is easily the most depressing thing I have read so far today

 

[Big_Hitter]

I understand the context in which you said this but taken as a stand-alone statement, that is easily the most depressing thing I have read so far today

well if it makes you feel any better sometimes a big piece of us dies?

 

[RetiredGypsy]

well if it makes you feel any better sometimes a big piece of us dies?

Yeah but they've had a pill for that for a long time now.

 

[haha]

These are the best two sites I have ever read about WR.

I have never been a fan of the 4% rule for early retirees. It is based on a 30 year depletion-based model. I certainly hope I have more than 30 years and would like to leave a legacy for my family. For those of you in a similar situation these may be useful.

Cheers

https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/

https://portfoliocharts.com/2016/12...al-rates-are-the-runway-to-a-long-retirement/

This Portfolio Charts.com site is extremely interesting. Who is the person behind it?

Ha

 

[Lsbcal]

This Portfolio Charts.com site is extremely interesting. Who is the person behind it?

Ha

See: https://portfoliocharts.com/about/

 

[Nightcap]

The other fun part is that the SWR calculations effectively assume that money is your ONLY source of retirement income. That is almost never the case in reality. When you account for pensions, social security payments, etc, the "real" safe withdrawal rate for most people is likely a significantly higher percentage of their assets. At 62, my COLA's "pension + SS" payments will cover 81.4% of my spending levels for my current lifestyle. If my nest egg only has to fund 80% of my spending for 17 years and then 20% of my spending for 30 years, then the "4% rule of thumb" becomes quite meaningless...

I use the Present Value of my Social Security in my calculations.

 

[haha]

See: https://portfoliocharts.com/about/

Thanks Lsbcal. I couldn't imagine that this was essentially an anonymous guy. Not only are the ideas very advanced, but so are the graphics.

Ha

 

[RetiredGypsy]

This article (link below) seems to indicate that the Perpetual Withdrawal Rate (PWR) is around 3.5%, although I have read other articles which say it is around 3%.

https://portfoliocharts.com/2016/12...al-rates-are-the-runway-to-a-long-retirement/

How interesting. I went back and read through the Trinity Study and they do have unadjusted constant percentage withdrawal rates. Up to 30 years starting just before the Great Depression, there was a 96-88% success rate at 7%(!) between 20-30 years. Starting in 1946, it's 100% across all time periods.

At 6% that increases to 95-98% and remains 100%, respectively.

They even have this to say about 3-4% withdrawal rate:

Finally, the lower withdrawal rates of 3% and 4% recommended by some analysts appear to be excessively conservative for portfolios with at least 50% stock, unless the investor wishes to leave a substantial portion of the initial retirement portfolio to his/her heirs.

Huh. I never caught that there was unadjusted rates in the Trinity Study before.

 

[FREE866]

I use the Present Value of my Social Security in my calculations.

how do you calculate that?