FIRECALC & WR's

[Midpack]

Just in case it got lost in the further discussion, my questions were really designed to probe Midpack's red line scenario that ran out of money. I was thinking that running a 30 year plan for many (but not all retirees) who are 65 is ignoring the real estate asset's place in the picture. For us our house is about 35% of net worth (house + liquid assets, ignoring SS).

Like I said, the graphs (and FIRECALC) show a scenario where the 4% SWR withdrawal methodology is followed regardless, and again no one would or should do that. We all need to have a Plan B (or several) to fall back on, selling your house or a reverse mortgage are certainly options.

 

[Lsbcal]

OK. I must be missing the the point here. I agree that looking at those worst case curves (along with the rising ones) is a good exercise.

 

[youbet]

Like I said, the graphs (and FIRECALC) show a scenario where the 4% SWR withdrawal methodology is followed regardless, and again no one would or should do that.

Well...... I kept spending during the 2008/2009 downturn despite my portfolio being down in excess of 30%. It was just a hunch but it turned out to be the right thing to do. The discretionary activities we might have cancelled were all things we'd be unlikely to do today but were things we really wanted to do while we still could. And our FIRE portfolio recovered despite not cutting back on discretionary spending.

Time keeps running through the hour glass. There is a risk associated with not doing things......

 

[jebmke]

Well...... I kept spending during the 2008/2009 downturn despite my portfolio being down in excess of 30%. It was just a hunch but it turned out to be the right thing to do. The discretionary activities we might have cancelled were all things we'd be unlikely to do today but were things we really wanted to do while we still could. And our FIRE portfolio recovered despite not cutting back on discretionary spending.

Time keeps running through the hour glass. There is a risk associated with not doing things......

Also, for those who have discipline, recessions are sometimes the best time to spend above the trend line for things like home-improvements, travel etc. The prices can be excellent and availability (contractors, in the case of home improvements) is also usually not a problem. It does take some discipline to not spend in follow-on years if you need to maintain your asset base to a target.