Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
how about 14% SWR
Old 05-16-2006, 01:28 PM   #1
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Location: Los Angeles area
Posts: 1,432
how about 14% SWR

Experts say retirees can spend about four percent of their assets each year.
But more than a-third of respondents thought retirees could spend up to 14
percent a year.

http://news.moneycentral.msn.com/pro...515&ID=5722022
__________________

__________________
learn, work, save, invest, fire
CyclingInvestor is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: how about 14% SWR
Old 05-16-2006, 01:31 PM   #2
Thinks s/he gets paid by the post
maddythebeagle's Avatar
 
Join Date: Jun 2005
Posts: 2,450
Re: how about 14% SWR

Isnt that what credit cards are for : To bad JG isnt here anymore to share his side of the story.
__________________

__________________
- Hurry! to the cliffs of insanity!
maddythebeagle is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 01:34 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dawg52's Avatar
 
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 7,446
Re: how about 14% SWR

Cool! It's steak and lobster every night for me.* 8)
__________________
Retired 3/31/2007@52
Full time wuss.......
Dawg52 is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 01:45 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Jul 2003
Location: Pasadena CA
Posts: 2,695
Re: how about 14% SWR

Fourteen percent, no problem. Just pick the stocks that go up.
__________________
T.S. Eliot:
Old men ought to be explorers
yakers is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 01:48 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: how about 14% SWR

Quote:
Originally Posted by yakers
Fourteen percent, no problem. Just pick the stocks that go up.
And gold, gold!, GOLD!!!!!!!!!!!!
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 02:12 PM   #6
Recycles dryer sheets
 
Join Date: May 2006
Posts: 52
Re: how about 14% SWR

Quote:
Originally Posted by CyclingInvestor
Experts say retirees can spend about four percent of their assets each year.
But more than a-third of respondents thought retirees could spend up to 14
percent a year.

http://news.moneycentral.msn.com/pro...515&ID=5722022
My read of the article says that 28% of respondents (who are not experts) thought retirees could spend 10% or more of their retirement per year.* 11% of were delusional in thinking they could do 15% or more.* A very large chunk (40%) had no idea.

Here is the excerpt -

When asked what percentage of their nest eggs they could safely withdraw each year in retirement, study participants responded:


Less than 5% – 10%
5% to 9% – 19%
10% to 14% – 17%
15% to 24% – 6%
25% to 49% – 2%
50% or more – 3%
Don’t know – 40%
__________________
doushioukanaa is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 02:17 PM   #7
Full time employment: Posting here.
cj's Avatar
 
Join Date: Jun 2005
Posts: 517
Re: how about 14% SWR

14% - maybe if you're 90.
__________________
cj is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 02:19 PM   #8
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: how about 14% SWR

Quote:
Originally Posted by cj
14% - maybe if you're 90.
And plan to die by 97.
__________________
wabmester is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 02:46 PM   #9
Thinks s/he gets paid by the post
lazygood4nothinbum's Avatar
 
Join Date: Feb 2006
Posts: 3,895
Re: how about 14% SWR

before discovering this forum and not knowing much about inflation effects, i thought withdrawal would be 6%. a few different scenarios on firecalc shows me safe at 4.76 to 5.11%. but i'm not a spender and could easily live on much less than 4%.

fortunately i found you guys just months after quitting.
__________________
"off with their heads"~~dr. joseph-ignace guillotin

"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
lazygood4nothinbum is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 02:52 PM   #10
Recycles dryer sheets
 
Join Date: Apr 2006
Posts: 190
Re: how about 14% SWR

Quote:
before discovering this forum and not knowing much about inflation effects, i thought withdrawal would be 6%. a few different scenarios on firecalc shows me safe at 4.76 to 5.11%. but i'm not a spender and could easily live on much less than 4%.
I confess I'm having a lot of trouble getting the new firecalc to come within even 0.5% SWR of the old firecalc and I can't figure out why.

There is a lot of talk about 4% and it's gotten embedded in psyches, but the NORM is very likely to be people who will get at least some Social Security and that reality drives a 30 yr number well above 4%.
__________________
modlair is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 02:59 PM   #11
Thinks s/he gets paid by the post
lazygood4nothinbum's Avatar
 
Join Date: Feb 2006
Posts: 3,895
Re: how about 14% SWR

Quote:
Originally Posted by rodmail
drives a 30 yr number well above 4%.
i got the 5.11% when i plugged in future income from a reverse mortgage later in life. likely not something i'll spend, was just curious to see how that would effect spending if i wanted it.
__________________
"off with their heads"~~dr. joseph-ignace guillotin

"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
lazygood4nothinbum is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 03:00 PM   #12
Thinks s/he gets paid by the post
retire@40's Avatar
 
Join Date: Feb 2004
Posts: 2,670
Re: how about 14% SWR

Quote:
Originally Posted by rodmail
There is a lot of talk about 4% and it's gotten embedded in psyches, but the NORM is very likely to be people who will get at least some Social Security and that reality drives a 30 yr number well above 4%.
Take out from the equation the Depression in 1929 and the sideways market from the late 60's to 70's, and you'll have a 5% or better SWR. *Or give yourself a 95% success rate and you might get the same results.

I would rather keep those periods in my equation just in case.
__________________
No man is free who is not master of himself. --- Epictetus
Enjoy Yourself (It's Later Than You Think). --- Guy Lombardo
retire@40 is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 03:07 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,538
Re: how about 14% SWR

I think a lot of people "assume" that their retirement portfolios can be safely invested to yield 8 to 10% per year, and they can withdraw all of that. No thought at all about inflation.

The American public is very poorly informed. I predict interviews of shock and horror on CNN and other stations when people finally realize what it takes! (maybe about 10 years from now). Just like today's shock about gas prices and sheer refusal to believe that gas prices will naturally go up.

Audrey
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 03:17 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Re: how about 14% SWR

Quote:
Originally Posted by audreyh1
I think a lot of people "assume" that their retirement portfolios can be safely invested to yield 8 to 10% per year, and they can withdraw all of that.* No thought at all about inflation.
Audrey
Yep. The greatest and most consistent misunderstanding I hear from acquaintances regarding retirement funding is that if you don't touch the principal, just spend the earnings, you'll be OK forever.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 03:44 PM   #15
Thinks s/he gets paid by the post
 
Join Date: Jul 2003
Location: Pasadena CA
Posts: 2,695
Re: how about 14% SWR

Quote:
Originally Posted by youbet
Yep. The greatest and most consistent misunderstanding I hear from acquaintances regarding retirement funding is that if you don't touch the principal, just spend the earnings, you'll be OK forever.
Hey, if someone had diversified dividend paying stocks and can live on the dividends (maybe 2-4% of the portfolio) then they should be able to go on just about forever. Gotta have a big portfolio to do that.
__________________
T.S. Eliot:
Old men ought to be explorers
yakers is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 04:42 PM   #16
Recycles dryer sheets
 
Join Date: Apr 2006
Posts: 190
Re: how about 14% SWR

Quote:
I confess I'm having a lot of trouble getting the new firecalc to come within even 0.5% SWR of the old firecalc and I can't figure out why.

Quote:
There is a lot of talk about 4% and it's gotten embedded in psyches, but the NORM is very likely to be people who will get at least some Social Security and that reality drives a 30 yr number well above 4%.

Take out from the equation the Depression in 1929 and the sideways market from the late 60's to 70's, and you'll have a 5% or better SWR. Or give yourself a 95% success rate and you might get the same results.
Yeah, that would be data mining, though. It's not fair to do that.

I can't get it to yield the old firecalc numbers with the same inputs. There is a blurb that says the most recent 30 yrs is not considered (or something like that) in the new one, and that would maybe explain it since it includes the crush of the early 70's but excludes the boom of the 80's and 90's.

Most curious though. I'm doing pretty normal stuff. Lump sum at the start, an annual withdraw with the default inflation increase per year and the result is consistently 0.5% worse than the old one.

Shrug.
__________________
modlair is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 06:57 PM   #17
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Re: how about 14% SWR

Quote:
Originally Posted by yakers
Hey, if someone had diversified dividend paying stocks and can live on the dividends (maybe 2-4% of the portfolio) then they should be able to go on just about forever. Gotta have a big portfolio to do that.
Works great as long as the dividends rise with one's expenses over the next 5-6-7-8 decades.

But according to anecdotal financial advisor's reports, if we're in our eighties then it won't matter if the dividends stay flat.

I think it'll all work out fine. People will believe Ken Dychtwald's crap about not wanting to rot in retirement, so they'll be quite happy to keep working for food fulfillment. And their payroll taxes will bail out both Social Security & Medicare...
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 07:39 PM   #18
Recycles dryer sheets
 
Join Date: Jun 2002
Posts: 374
Re: how about 14% SWR

Quote:
Originally Posted by rodmail

Most curious though.* I'm doing pretty normal stuff.* Lump sum at the start, an annual withdraw with the default inflation increase per year and the result is consistently 0.5% worse than the old one.*
I reported the same thing as I exercised the new version. I can understand saomewhat different results between the two when you target SWR's of less than 100% (because the new version drops the incomplete periods), but it seems to me like the results from the two versions ought to be a bit closer when modeling 100% safe scenarios.

Cb
__________________
Cb is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 07:41 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: how about 14% SWR

It also works to just take the dividends if the NAV on the fund or the price on the stocks rises at least at the rate of inflation...the dividend rate doesnt have to rise...
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: how about 14% SWR
Old 05-16-2006, 09:16 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Re: how about 14% SWR

CFB,

The problem is that that doesn't always happen.* The worse time to start retirement in history, the early 70's, saw inflation skyrocket while NAV's actually dropped year after year.* Firecalc tests that, no problem.* But Firecalc assumes you stay at the same withdrawal rate even during fabulous years when you'd be tempted to harvest much more thereby building up your portfolio to help carry through such tough times.
__________________

__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Is the S&P 500 the best data set to base our 4% SWR on? Dorus FIRECalc support 9 08-12-2006 02:12 AM
indexing SWR to inflation or to valuation perinova FIRE and Money 16 05-15-2006 06:48 PM
Another SWR Question? mb FIRE and Money 14 01-06-2006 08:55 AM
Implications of SWR GDH FIRE and Money 13 10-26-2004 07:53 AM
SWR, terminal values, TIPS, I-bnds & comm paper sgeeeee FIRE and Money 144 02-25-2004 04:35 PM

 

 
All times are GMT -6. The time now is 01:07 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.