Is this a variable WR option?

[astroboy]

I have run a spreadsheet with all costs (including medical and taxes) and income sources, with what I think are appropriate COL adjustments for each (except for taxes that are based on actual income with current rates, etc) for 35 years and find that due to different timings of different spending & income events, the amount to be w/drawn from investments varies quite a bit from year to year.

Because it is impossible to input all these variables into FIRECalc, would it be an option (just for planning purposes) to take an average of the 35 years worth of withdrawals and use that average as the only withdrawal amount from investments to see how successful plan may be. In the plan, most of the first 20 years would require less than the "average".

Inflation has already been accounted for in adjustments to living expenses and income sources so the "average" withdrawal amount would not be inflation adjusted.

Just trying to find a way to better plan taking into account varying withdrawal amounts.

Am I missing something with this idea?

 

[kaudrey]

I think it would be OK to take an average - I assume you mean to plug the numbers into Firecalc, right? Especially if the first bunch of years would actually have lower withdrawals - to me that would make it conservative, and I like that for projections.

My spreadsheet has all sorts of differing withdrawal amounts - higher travel budget in the first 15 years, lower withdrawals once my pension kicks in, etc. According to it (using conservative rates of return and high health care costs), I'll run out of money around 103. I'm OK with that.

In Firecalc I just plug in my starting expenses and adjust it up for inflation, whereas in reality, costs may go down when you slow down in old age (especially for me when I don't travel as much, because I basically plan to see the world in those early years).

 

[Rich_by_the_Bay]

I'd be cautious about choosing a fixed rate based on an average. The net impact can be very much related to the sequence of returns, not just the overall average.

A fixed percent of total assets is safer, if you can handle the volatility of income. ESRBob would add that you can limit down year withdrawals to 95% of the prior year's number and still be safe, given appropriate diversification.