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Old 01-09-2012, 08:13 PM   #21
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We chose a "per cent of total portfolio per year" plan but don't have enough history to share meaningfully. However, things look pretty much lateral, with our costs running a little less than anticipated so far. Managed 3.6% for calendar 2011 without penny-pinching.

That is what I have been doing for four years . I did end up taking a budget cut in 2009 but luckily I was eligible for SS so my budget was less but not at nose bleed level . I also have a pretty nice slush fund built up .I have really not pinched penny's just lived my basically thrift ways .
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Old 01-09-2012, 08:16 PM   #22
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I doubt anyone is going to be able to beat my first five year withdrawal percentages.


Hmmmmm!
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Old 01-09-2012, 08:18 PM   #23
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Hmmmmm!
Put yer numbers where yer Hmmmmmm! is....
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Old 01-09-2012, 08:19 PM   #24
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I expect those were one-time events and are part of our front loaded, enjoy-it-while-you-still-can spending strategy (I'm 65).

Locked and loaded, hunkered down for incoming. Fire away...

Even though I never went above 4% there is something to be said for enjoying it while you can .I have been following Sarah on her Peru adventure and cheering her on that she is doing it now . Lets face it that adventure is not for the Medicare group !
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Old 01-09-2012, 08:20 PM   #25
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Am I the only one to find Firecalc graphs not helpful ? To me the graph below does not say much...
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While I don't know what my individual line will look like in 10, 20, or 30 years, I do know what it looks like after six and a half years of retirement:

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Old 01-09-2012, 08:21 PM   #26
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Am I the only one to find Firecalc graphs not helpful ? To me the graph below does not say much...
Try reading the information that accompanies the graph on the FIRECalc site. You might find it educational.
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Old 01-09-2012, 08:56 PM   #27
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I looked closer at the OP's graph and saw that ReW lost about 33% from top in Jul 07 to Apr 09.

Remember how scary it was then? Thank heaven history did not repeat (knock on wood), because in the Great Depression, the Dow lost nearly 90% of its value. To put that in perspective, I took the liberty to draw up an alternative scenario.



Should we all kiss Bernanke or what?
Or is it too early?
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Old 01-09-2012, 09:00 PM   #28
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Did you take your SS yet Rich?
No, but since we are living off post-tax savings til full retirement age of 66, SS will serve to gross-up deferred IRA distributions which will generate ordinary income for tax purposes. IIW, SS will pay my income taxes when I switch from tax-free dollars to taxable dollars. The left-overs will be discretionary income.
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Old 01-09-2012, 09:09 PM   #29
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I looked closer at the OP's graph and saw that ReW lost about 33% from top in Jul 07 to Apr 09.
Actually, my portfolio low hit a couple of weeks after the end of the quarter captured here. I lost 38% from the high.

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Remember how scary it was then?
Yes I vividly recall the sick feeling in the pit of my stomach.
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Old 01-09-2012, 09:13 PM   #30
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But, now is time!

Oops, might have offended the market god. Oh please, I am down on my knees...
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Old 01-09-2012, 09:55 PM   #31
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I guess the thing to do is to remember that one is rebalancing each year to take advantage of market swings. And, of course, one should have a bucket that has seveal years withdrawal money so one can ride out a big downturn. These are some of the basics, are they not?
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Old 01-09-2012, 10:02 PM   #32
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I'll also say 'Thanks' to REWahoo for sharing, it motivated me to take another look at where I'm at, and that's always a good thing.

My situation isn't apples-to-apples, DW still working, and no SS yet, and no real large purchases (but a string of medium-to-large, but not unexpected ones - room addition, patio, kitchen appliances, house painted, new car). But actual spending is a little over 4% of starting portfolio. But it has a lesser effect on portfolio with DWs (moderate) income (actual outflow is less than 4% with that income offset). NW is up ~ 15% from EOY2003, so all things considered, I'm happy. Esp when we hear what a terrible time this was in the economy.

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Am I the only one to find Firecalc graphs not helpful ? To me the graph below does not say much...
The graphs speak volumes. And they are super-helpful. One (of the many things) they say is that there is a wide range of historical outcomes. We can't know which path we will be on, or if future paths will be different, but it is still informative.

Let's say you plan a vacation, and it is the rainy season where you are going. That doesn't mean you will get rained out (or that you won't get rained out in the dry season), but you have some history and some range of expectations. It is still helpful information.

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Thank heaven history did not repeat (knock on wood), because in the Great Depression, the Dow lost nearly 90% of its value. To put that in perspective, I took the liberty to draw up an alternative scenario.



Should we all kiss Bernanke or what?
Or is it too early?
Yes, but I don't think REWahoo would be drawing those %'s if he retired right at a 1929 level peak. This is where we start talking valuation....

-ERD50
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Old 01-09-2012, 10:02 PM   #33
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These are some of the basics, are they not?
They are. But would they be enough if we were to have another Great Depression?

Most FIRECalc runs show some percentage of failure, unless the WR is very low. What do these few percents of failure correspond to, if not the Great Depression?
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Old 01-09-2012, 10:09 PM   #34
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I guess the thing to do is to remember that one is rebalancing each year to take advantage of market swings. And, of course, one should have a bucket that has seveal years withdrawal money so one can rid out a big downturn. These are some of the basics, are they not?
No, they are not (IMO).

A bucket of money that can ride out several years could leave you with a high EQ% AA if we saw an extended downturn. And then we could have several more years of downturns.

Until FIRECALC has a 'bucket' model(*), I'll stick with re-balancing. That's the basics, IMO.


(*) IIRC, this was discussed not too long ago. And as I recall, it was pretty tough for people to agree on what the rules should be for a bucket. You can't (properly) model something you can't define.

-ERD50
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Old 01-09-2012, 10:09 PM   #35
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Yes, but I don't think REWahoo would be drawing those %'s if he retired right at a 1929 level peak. This is where we start talking valuation....
-ERD50
True. We now know what we just experienced was not Great Depression II, but I remember that we surely felt like it then.
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Old 01-09-2012, 10:11 PM   #36
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They are. But would they be enough if we were to have another Great Depression?

Most FIRECalc runs show some percentage of failure, unless the WR is very low. What do these few percents of failure correspond to, if not the Great Depression?
The great inflation of the 80s.

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Old 01-09-2012, 10:14 PM   #37
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Hmm... I started work and bought my first home in 1980. Inflation was bad, really bad, but I was not scared as what we have just been through. Why? Was it because having an income allowed me to keep up with inflation? However, I do not remember hearing or reading about retirees facing hardship like everybody did during the GD.
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Old 01-09-2012, 10:20 PM   #38
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Hmm... I started work and bought my first home in 1980. Inflation was bad, really bad, but I was not scared as what we have just been through. Why?
Because you were young, and had just borrowed money for the mortgage?
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Old 01-09-2012, 10:24 PM   #39
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I paid 14% for that 1st 30-yr mortgage. I did not score 14% pay raise every year after that.
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Old 01-09-2012, 10:25 PM   #40
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Yes, but I don't think REWahoo would be drawing those %'s if he retired right at a 1929 level peak.
As I mentioned, the primary reason for my (choke!) 9.8% withdrawal rate in 2007 and the almost as bad 7.9% in 2008 was the motor home I bought. I signed the purchase agreement in late July of 2007, a few weeks before the market hit an all time high - and W2R "wheed!" us down into what would become the great abyss.

Had I known then what I know now, I'd probably still be tent camping...
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