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Do you have a zero withdrawal rate?
Old 09-09-2019, 06:26 PM   #1
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Do you have a zero withdrawal rate?

Curious who else has a zero withdrawal rate. Income that meets or exceeds expenses.
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Old 09-09-2019, 06:37 PM   #2
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Do you mean zero draw of principal (dividends only), or zero draw from portfolio at all - aka 100% SIRE? Presumably the latter would mean you have pensions and Soc Sec that exceeds spending. Buying an annuity would be a gray area. There have been several FIRE vs SIRE polls if you want to do a search.
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Old 09-09-2019, 06:51 PM   #3
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Originally Posted by Midpack View Post
Do you mean zero draw of principal (dividends only), or zero draw from portfolio at all - aka 100% SIRE? Presumably the latter would mean you have pensions and Soc Sec that exceeds spending. Buying an annuity would be a gray area. There have been several FIRE vs SIRE polls if you want to do a search.
Yes, sorry. Zero draw from principal, savings. Iíll search , never heard of SIRE before.

I see all the time people posting about their 3,4,5 percent withdrawal rates. Just unsure what this actually means and where they are withdrawing from.
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Old 09-09-2019, 06:54 PM   #4
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Iím not sure what you mean but over the last 2 years my portfolio has gone up more than I have taken out so I guess so.
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Old 09-09-2019, 07:00 PM   #5
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Iím not sure what you mean but over the last 2 years my portfolio has gone up more than I have taken out so I guess so.
You have been withdrawing from your portfolio. Iím talking about zero portfolio withdraws. Where your income (SS, pensions, part time job, annuity) covers your annual expenses.
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Old 09-09-2019, 07:21 PM   #6
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Yes, sorry. Zero draw from principal, savings. I’ll search , never heard of SIRE before.

I see all the time people posting about their 3,4,5 percent withdrawal rates. Just unsure what this actually means and where they are withdrawing from.
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Originally Posted by Floridatennisplayer View Post
You have been withdrawing from your portfolio. I’m talking about zero portfolio withdraws. Where your income (SS, pensions, part time job, annuity) covers your annual expenses.
So you are taking all/some dividends and interest from your portfolio along with pension and Soc Sec? If yes, that’s not actually a 0% WR. That’s the old ‘Norwegian widow’ method, taking investment income while leaving principal untouched.

And if you buy/bought an annuity, that’s not a 0% WR, it’s just a one time front loaded withdrawal.
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Old 09-09-2019, 07:24 PM   #7
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I am spending only 2.7% from my stash for the last 12 months.

And yes, it it less than the usual portfolio gain meaning dividend+interest+capital gain, but it is not zero.
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Old 09-09-2019, 07:42 PM   #8
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So you are taking all/some dividends and interest from your portfolio along with pension and Soc Sec? If yes, thatís not actually a 0% WR. Thatís the old ĎNorwegian widowí method, taking investment income while leaving principal untouched.

And if you buy/bought an annuity, thatís not a 0% WR, itís just a one time front loaded withdrawal.


Iím talking Zero from your portfolio. No interest, no dividends. No withdrawals.

Just Soc. Sec., pensions, and yes annuity payouts as they are a grey area but are really like a pension that cover your annual expenses.
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Old 09-09-2019, 07:58 PM   #9
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I get it... he is saying where pensions and SS (and other "income") exceed spending so there is no need to use any retirement portfolio money.

Not here... my pension is small and we have not yet started SS... even once we start SS, pension and SS will only cover 63% of our spending so we will be using some money from our portfolio.... but only about 2% or so.... so I expect our portfolio will keep growing since it will earn more than the 2% we withdraw.
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Old 09-09-2019, 08:02 PM   #10
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Why do you care? It's not one size fits all.
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Old 09-09-2019, 08:08 PM   #11
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The opposite here. No income streams at all yet, and only SS expected in the far future. So all living expenses are supplied by the portfolio.
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Old 09-09-2019, 08:10 PM   #12
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Originally Posted by Floridatennisplayer View Post
Yes, sorry. Zero draw from principal, savings. I’ll search , never heard of SIRE before.

I see all the time people posting about their 3,4,5 percent withdrawal rates. Just unsure what this actually means and where they are withdrawing from.
I'm pretty sure most are talking about withdrawing that percent annually from a portfolio of investments independently of any other income streams such as pension or SS.
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Old 09-09-2019, 08:13 PM   #13
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My wife is working, so no withdrawals here. That's like getting a pension and SS, isn't it?

I haven't worked in ages.
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Old 09-09-2019, 08:15 PM   #14
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I have a negative withdrawal rate. I have to take RMD's from the inherited IRA's. Those are the only "withdrawals" I make from the paper asset portfolio. 44 percent of that total dollar amount goes directly into taxable stock investments. 52 percent of that total dollar amount goes directly into money market accounts and savings. So 96 percent goes right back into paper assets. 65 percent of that total dollar amount goes to additional principal payment on a rental mortgage. So 161 percent of the RMD's are automatically invested. That's in addition to the principal payments made in ordinary mortgage payments and some excess cash that periodically gets invested.

Income from pensions, Social Security, and the rentals exceeds expenses. RMD's are required, but have no effect on the paper portfolio.
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Old 09-09-2019, 08:15 PM   #15
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Like others have said with your scenario it wouldn't be zero WR but you can look at it how you want.

Our WR last year was .4% but had one SS check for the year and a low cash flow for a few months.

Of course as your portfolio continues to grow, and your WR stays the same, your WR% will continue to go down, because of the growth of the portfolio.
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Old 09-09-2019, 08:18 PM   #16
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Curious who else has a zero withdrawal rate. Income that meets or exceeds expenses.
Not here, didn't structure my life that way. Hope you feel lucky you did.

Drawing it down as planned after my wife died and I decided it was best to tend to our kids rather than keep putting points on the board.

Post your question as a poll, then you can see how thin the air is where you breathe.
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Old 09-09-2019, 08:24 PM   #17
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I am spending only 2.7% from my stash for the last 12 months.

And yes, it it less than the usual portfolio gain meaning dividend+interest+capital gain, but it is not zero.
Uh, just remember that my wife started her SS a few months ago. That 2.7% number is spending, and the WR has to be less, now that we have some "income".

Lemme see... Quicken, Quicken on the screen, what's my "income" for the last 12 months?

Take that away from the spending, and the WR is ... (drum roll) ... 2.3%. Next year it will be less when we have a full 12 months of SS, plus I had some non-recurrent expenses that will go away, hopefully not replaced by something else.

PS. My checking account is with B of A. Their computer periodically sends me a message about my "financial status". It reminds me that my "income" is just a fraction of my spending, and offers some tools for budgeting.

Obviously, it does not count the IRA transfer as "income", hence worries about me depleting the checking account and ending up broke.

Funny thing is that I have plenty of money in an roll-over IRA account at Merrill Edge, which is part of B of A now. Their programmer should know to write a program to look at the WR to see that it is within the 4% WR. And I have money at other brokerages too.

PPS. Yes, next year the WR will be less than 2%, using the last 12-month expense as the baseline. How much less than 2%? It does not matter, does it?

PPS. I forgot one thing. If the market crashes by 50%, that will drive my WR back up.
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Old 09-09-2019, 08:30 PM   #18
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Not taking any withdrawals currently. We have taken funds from DW ira previously. But stopped after I realized we were essentially just moving funds to a taxable investment account. Pensions and rental income cover expenses.
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Old 09-09-2019, 08:31 PM   #19
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There have definitely been some posts on this forum about 0% WR, but definitely not us currently or ever in the future.
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Old 09-09-2019, 08:33 PM   #20
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Like others have said with your scenario it wouldn't be zero WR but you can look at it how you want.

Our WR last year was .4% but had one SS check for the year and a low cash flow for a few months.

Of course as your portfolio continues to grow and you WR stays the same your WR% will continue to go down because of the growth of the portfolio.
If income from pension, SS, part-time job covers expenses such that no withdrawals are made from the portfolio and all investment income reinvested, then of course itís a zero withdrawal rate.
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