|
|
11-18-2011, 09:48 PM
|
#21
|
Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,856
|
Quote:
Originally Posted by 67walkon
I understand the 4% concept. My wife, a long retired banker, understands it to. But how does it work for you guys?
So how does it work?
|
I'll tell you a secret.
The only ER who religiously follows the 4% SWR system is the hapless Y2K ER on Raddr's board. That's because he's not a real human being so he doesn't vary from the program for any reason whatsoever.
Raddr's Early Retirement and Financial Strategy Board • View topic - Hypothetical Y2K retiree update
Us real humans have lumpy expenses (new roof, fantasy vacation, kid's college) or we shrink our spending during bear markets.
What we really do is use the 4% SWR as an indicator of when our portfolio is likely to provide us with 30 good years. Then we ER and spend our time contributing to threads like this one.
Quote:
Originally Posted by 67walkon
It's impossible to tie down all the variables and often I fear I'm erring on the conservative side way too much.
But I don't know if I'll ever get over the need to save something every check or every year or whatever. I'll have to work at it.
|
Exactly. You just keep working until you figure out all the variables to your personal satisfaction. Or at least until you can no longer work.
Some people don't enjoy their jobs very much and quickly figure out the ER solution. Others apparently enjoy working more than they enjoy working on ER problems.
__________________
*
Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."
I don't spend much time here— please send a PM.
|
|
|
|
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!
|
11-18-2011, 10:08 PM
|
#22
|
Thinks s/he gets paid by the post
Join Date: May 2011
Location: South Eastern USA
Posts: 1,068
|
Quote:
Originally Posted by Nords
..... Others apparently enjoy working more than they enjoy working on ER problems.
|
I love it!
|
|
|
11-19-2011, 03:35 AM
|
#23
|
Thinks s/he gets paid by the post
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
|
According to the SWR method, you need to take up to 4% of your nest egg in year 1 (in your case $80,000). You do not spend $90,000 on top, which would represent 8.5% withdrawal in total for the the first year.
Quote:
Originally Posted by 67walkon
In year 1, under the 4% SWD method, would they spend $80,000, or 4% of the nest egg? Or would they be able, should they choose to do so, take the $80,000 plus the $90,000 cash flow?
|
__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
|
|
|
11-19-2011, 08:17 AM
|
#24
|
Full time employment: Posting here.
Join Date: Apr 2011
Posts: 625
|
Quote:
Originally Posted by Nords
|
Wow that thread is terrific.
What does FIRECalc say inputting the parameters of Y2K ER's scenario?
|
|
|
11-19-2011, 09:50 AM
|
#25
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,821
|
Quote:
Originally Posted by arebelspy
Wow that thread is terrific.
What does FIRECalc say inputting the parameters of Y2K ER's scenario?
|
I didn't read the whole thread, but it does look interesting. Anyone know if the spreadsheet for the table in this post is available? If not, it would be pretty easy to reverse-eng the formulas.
Raddr's Early Retirement and Financial Strategy Board • View topic - Hypothetical Y2K retiree update
As I understand it, FIRECALC already has those numbers in it. However, for you to 'experience' a 1999-2010 data-set, you need to set your portfolio life to 11 years. A default 30 year life will not include the most recent 29 years.
Bottom line, it demonstrates that a 4% starting from a bubble is aggressive.
-ERD50
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|