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Old 01-02-2015, 07:19 AM   #21
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Since some people actually withdraw funds quarterly or monthly, one can conceivably select a monthly or quarterly SWR based on very latest/current market environment.

I plan to just use an annual SWR percentage based on portfolio value in September/October, - typical market low.

I like the idea of stress testing portfolio SWR with Fibonacci percentages just to see what a worst case might look/ feel like. Others have suggested using a portfolio balance in March 2009, which was very near one of the Fibonacci percentages (-66 pct).
I don't do that, simply because if the market recovers between September/October and January, when I take my withdrawal, I want to take advantage of the improved market conditions and take out more when things are higher.
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Old 01-02-2015, 07:49 AM   #22
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Since some people actually withdraw funds quarterly or monthly, one can conceivably select a monthly or quarterly SWR based on very latest/current market environment.

....
This [quarterly] is what I am currently/tentatively planning to do. This is not a true SWR drawdown, just constant percentage of portfolio. Would result in very roller-coaster-like fluctuations in spending, but with the benefit of quick response to downturns. Luckily, our retirement budget should be mostly discretionary spending, which would seem to be required to stomach this type of a withdrawal scheme.....
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Old 01-02-2015, 07:59 AM   #23
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Our annual withdrawal process is first driven by practical considerations: 75%+ of our annual income is received in December, and we take all distributions in cash. Our January annual withdrawal comes out of that, and the remainder is used to rebalance the remaining portfolio.
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Old 01-02-2015, 08:08 AM   #24
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Our annual withdrawal process is first driven by practical considerations: 75%+ of our annual income is received in December, and we take all distributions in cash. Our January annual withdrawal comes out of that, and the remainder is used to rebalance the remaining portfolio.
It is interesting to read all the different scenarios here and on Bogleheads. The academic research on SWR is, of necessity, very limited in the scenarios it can examine. In real life, however, it seems that everyone has different situations!

I'll never ignore the work by Wade Pfau, in particular, but it is best seen as a starting point for analysis, IMVHO. I will continue to use the true SWR as a checkpoint--can/could we live comfortably on this relatively low percentage? The actual withdrawal strategy, however, will be a constant percentage, meaning more aggressive in our early retirement years, albeit with the realization that it likely will have serious dips at times.
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Old 01-02-2015, 09:09 AM   #25
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My "big bond fund" generates a monthly income stream in dividends I use to pay my expenses. The monthly dividends from this bond fund have declined a bit in the last few years so to supplement my monthly income stream I have begun taking a stock fund's quarterly dividends in cash instead of reinvesting them. Any excess dividends get reinvested into the big bond fund.
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calculating wr question
Old 01-02-2015, 01:22 PM   #26
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calculating wr question

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Originally Posted by audreyh1 View Post
I don't do that, simply because if the market recovers between September/October and January, when I take my withdrawal, I want to take advantage of the improved market conditions and take out more when things are higher.

The timing of the withdraw is not necessarily September or October. Its could be monthly or quarterly or annually .

I just intend to use the portfolio balance as of September or October of the prior year to drive the SWR, due to historic market trends tends, to build in a certain small level of conservatism to my SWR.

So rather than year ending / starting January 1, I intend to use October 1...to calculate the annual SWR and budget.

Drawing the cash from the account can be anytime there is a need across the next 11 months and 29 days.

It's Kinda like those companies whose fiscal year starts or ends in a quarter other than "q4".
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Old 01-02-2015, 01:27 PM   #27
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Interesting. Typically 401k see a sharp increase in inflows today in january and February as more people fund these at an increased rate early in the year using bonuses etc.

Wonder if we will see a reversal in this January and February effect trend as the SWR impact grows with more retirees into spend down mode be save mode ...

Then again .. Probably not but was an interesting thought at 3:26 am this morning.
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