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Old 04-28-2013, 04:08 AM   #81
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Perhaps 9/11 was that event, but instead of resetting tumult, it had its own effect.
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Old 04-28-2013, 05:23 AM   #82
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Is anyone spending more in their first ER years with the plans to taper back (esp. when Social Security kicks in)?

The logic would be that when you're younger and healthier, you could do more with the money?
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Old 04-28-2013, 05:32 AM   #83
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Originally Posted by imoldernu View Post
.

Under my current $$$ plan, I'm good for age 90.
Don't use SWR, but it works out to about 4% w/ $5,000 estate.
Gives a cushion of five years.

Will join Hemlock Society @ age 87.
Hemlock Society?
My plan is to spend it all. Then join the "Welfare Society".
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Old 04-28-2013, 06:20 AM   #84
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Originally Posted by explanade View Post
Is anyone spending more in their first ER years with the plans to taper back (esp. when Social Security kicks in)?

The logic would be that when you're younger and healthier, you could do more with the money?
If one wants to spend $70k a year with $1.2M in assets, 4% won't do it. Instead one could divide the assets into 2 piles, one portion to cover expected SS in the pre SS years, the other portion for long term 4% withdrawals, or whatever rate you deem to use. The pre SS years are well over 4% when the portfolio is viewed as a whole.
If one were to start with say, $2M, then the $70k is less then 4% irregardless of SS.
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Old 04-28-2013, 06:34 AM   #85
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That is exactly my plan. In between 4% and 5% in the pre-SS years, being careful to keep MAGI under the ACA limits. Then 2% to 3% after that. Maybe that is too conservative.
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Old 04-28-2013, 07:08 AM   #86
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That is exactly my plan. In between 4% and 5% in the pre-SS years, being careful to keep MAGI under the ACA limits. Then 2% to 3% after that. Maybe that is too conservative.
Good plan.
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Old 04-28-2013, 12:28 PM   #87
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Is anyone spending more in their first ER years with the plans to taper back (esp. when Social Security kicks in)?

The logic would be that when you're younger and healthier, you could do more with the money?
Yes, although not for that reason. DH is retired and he is on SS actually. I've been semi-retired for 3 years. We had some higher spending during the past 3 years related to selling our really large house and buying a downsized house.

Also, we still have a couple of kids at home, one in college and the other in late high school. If I was to completely ER, we would have very high withdrawals for about the next 3 years at which point I would be eligible for SS and our expenses would be going down at that point.

In our plan we anticipate that our portfolio 3 years from now will be smaller than our current portfolio. Basically if the portfolio then is at least 60% of our current portfolio we would be fine at that point as our withdrawal rates would plummet.
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Old 04-28-2013, 02:17 PM   #88
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It's probably unsafe as a long-term WR, but we're planning on taking 5-5.5% for the 5 year period after ER until I qualify for SS, then reduce the withdrawal rate back to 4.5-5 until DW takes SS. At that point, we can cut back to 4% WR although that could be a total portfolio percentage rather than plus inflation, if necessary. We plan to downsize and move but travel in that 10-15 year period while we are still able, as Buff. Bill indicates. We have two children but don't aim to leave them anything, assuming at least one of us lives into our 90s, as I suspect will be the case. I'm fairly comfortable with 4% WR plus inflation as a safe benchmark; one can always reduce withdrawals for several years by taking a flat percentage or take other measures, as most people would do, if disaster strikes. Calculating the withdrawal based on life expectancy tables is another possible adjustment if the need arises.
I have not worked out the percentages but that is similar to our plan. DW will have small pension/ss/medicare when we ER. I will have to fund health care/life style for 4 years until I am 65.

So we will have a larger draw at the get go and then reduce it.

The biggest vulnerability is that first 4 years. We would have to adjust lifestyle if the market went south.

We also don't need to leave any inheritance. I know you have to plan for one to cover contingencies but I hate when some calculators have it growing to 4-5 mil at the end. Waste of money but I really struggle with how to balance that against risk.
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Old 04-28-2013, 02:24 PM   #89
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Is anyone spending more in their first ER years with the plans to taper back (esp. when Social Security kicks in)?

The logic would be that when you're younger and healthier, you could do more with the money?
That's how I run my plans. Especially with the fidelity model. I think
I-ORP assumes that. Even past SS I think you will spend more discretionary dollars as you are more active.
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Old 04-28-2013, 04:22 PM   #90
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Is anyone spending more in their first ER years with the plans to taper back (esp. when Social Security kicks in)?

The logic would be that when you're younger and healthier, you could do more with the money?
I plan to defer SS until I am 70. At that time, I also have to start drawing from my IRA so my spending is going to jump considerably due to higher taxes.
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Old 04-28-2013, 04:36 PM   #91
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I plan to defer SS until I am 70. At that time, I also have to start drawing from my IRA so my spending is going to jump considerably due to higher taxes.
Presume you do not need it sooner Good for you.
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Old 05-03-2013, 05:52 AM   #92
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Originally Posted by Jack_Pine View Post
I have not worked out the percentages but that is similar to our plan. DW will have small pension/ss/medicare when we ER. I will have to fund health care/life style for 4 years until I am 65.

So we will have a larger draw at the get go and then reduce it.

The biggest vulnerability is that first 4 years. We would have to adjust lifestyle if the market went south.

We also don't need to leave any inheritance. I know you have to plan for one to cover contingencies but I hate when some calculators have it growing to 4-5 mil at the end. Waste of money but I really struggle with how to balance that against risk.
Very similar here; small pension, SS, Tricare followed by Medicare. I seem to remember from other threads this (higher earlier withdrawals, lower later/post SS withdrawals) being a common pattern.
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Old 05-03-2013, 09:22 AM   #93
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For those of you unsure of a 4% withdrawl strategy, here is an article for you.


David Ning runs MoneyNing, a personal finance site that shares money moves you can make to significantly increase your chances of having a comfortable retirement. Here is a USNEWS and World report article:

Why 4 Percent Annual Withdrawals are Still Safe - Yahoo! Finance

Here are a few reasons a 4 percent withdrawal rate could still work for you:

-Safe withdrawal rates are based on the absolute worst case scenario.
-What are the chances you will live to 95?
-You can adjust your spending.
-Look at your budget closely, and there are many things that can be cut.
-Social Security will still serve as a solid foundation.
-Low expected returns won't last forever.

As for me, I think I will stick with a 3% plan until interest rates come back to historical norms.
What does "4% withdrawal strategy" mean?

To me, it means spend 4% of your assets in year one, then increase the dollar amount with inflation, in every year, without exception. That's what Firecalc tests.

If your plan includes the red, then it's not a pure 4% rule. It's some sort of flexible spending plan.
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Old 05-03-2013, 11:20 AM   #94
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Is anyone spending more in their first ER years with the plans to taper back (esp. when Social Security kicks in)?

The logic would be that when you're younger and healthier, you could do more with the money?
To me, it seems like there is an element of REVERSE delayed gratification in that. Hmm. That just doesn't feel right to me, somehow.

I guess that is easy for me to say, since I have enough to not feel deprived without doing this. Maybe I would see thing differently if I was longing to climb Macchu Picchu this year, like my retired older brother just did a year or two ago. I am almost 65 now, and if he could do it I could too (but I have no desire to do so). I can't see myself doing something like that in my 80's.

I expect that as I age, I will need more money for medical/dental expenses not covered by Medicare or my insurance (like my recent dental implant) so even if I am not climbing mountains I might need more than I do today. I will claim SS in five more years, though, so I will actually have more spending money than I do now. If I decide to move into a continual care place sometime in my 70's, well, the good ones are sometimes a little pricey.

Back on topic, I have been living on 2% right now although I am expanding my lifestyle and anticipate increasing my spending to 2.5% - 3% this year and/or next. I don't *expect* to live to 95, but I am *prepared* to live to 95-105. I do not see myself ever spending 4%, especially for the next 20 years, but I will not worry if I have to during my final years.
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