I consider the 4% rule, the very high end, so all my expenses including the car replacement, the new roof, should be in the SWR number. But those giant expenses are amortized over years.
So a $30K car, is really $3K/yr for 10 years
A $5K roof is good for 20 yrs, so that is $250 /yr
Basically this means most of the time I withdraw less and spend less than the 4%, when I bought the new van, it pushed my spending probably up a lot and I took out enough to cover it. No need to look at the % , as I won't buy another vehicle for at least 10 years.
My spending cash did get pretty low
The next year it was back to less than 4%.
I make sure that my recurrent expenses are low compared to the 4% WR. These encompass living expenses such as food/housing costs, and also discretionary spending such as travel expenses
In 2018, I spent 2.7%. I did not make any major purchases such as a new car, nor incur any major home repair or update.
That low WR should allow some room for unscheduled expenses in future years. I don't want to plan in finer details than that. It would take too much work, and would involve too many unanswerable questions.
Sorry for the threadjack but I can't help it. Is $5k for the roof for a garden shed or a house? My house is small and would be at least 20K.
Same here except it’s more of a emergency/splurge/large one-off expenses fund.I sequester excess funds not spent from my chosen SWR in an emergency fund. So far I have not tapped the emergency fund since unusual expenses (e.g. daughter's wedding) were accommodated within my SWR.
I know many of you target a set SWR (3-4%). Do you consider this as your routine yearly spend without periodic expenses such as car replacement or major house repair or do you include these expenses within your SWR?
The latter.I know many of you target a set SWR (3-4%). Do you consider this as your routine yearly spend without periodic expenses such as car replacement or major house repair or do you include these expenses within your SWR?