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01-09-2012, 04:44 PM
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#1
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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My S(?) WR
I don't think I'm the only one here who has run FIRECalc and looked at the 'spaghetti chart' showing the indecipherable tangle of year-by-year portfolio balances - and wondered "what will my chart look like in five, ten or 25 years?" Where will my lonely single line go and what story will it tell?
Spaghetti chart example using default FIRECalc numbers:
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:
Adding fuel to the "what's a reasonable SWR?" debate, here's my somewhat shameful track record of withdrawals:
2006 - 4.9% (portfolio withdrawals were sole source of income)
2007 - 9.8% (portfolio withdrawals were sole source of income)
2008 - 7.9% (portfolio withdrawals were sole source of income)
2009 - 6.1% (I began receiving SS benefits in Feb.)
2010 - 5.4% (DW began receiving SS benefits in May)
2011 - 4.2%
2012 - 3.9% (projected - I go on Medicare)
2013 - 3.5% (projected - DW switches from high risk pool to Medicare in April and begins receiving small non-COLA pension)
2014 - 3.2% (projected)
EDIT: All percentages are based on the initial portfolio value.
The nosebleed percentages in 07 and 08 were primarily due to the purchase of a motor home and other RV related spending. 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...
__________________
Numbers is hard
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01-09-2012, 04:52 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,363
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The trend of my projected withdrawals as a percentage of my beginning of year balance is similar - higher in the early years and lower once my pension kicks in at age 60 and lower still one SS kicks in at 70.
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01-09-2012, 05:18 PM
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#3
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,860
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Excellent summary! So the theory is that the worst is over and it's smooth sailing from here? Does FIRECalc like your next 30 years just as much now as it did six years ago?
I fear spouse and I headed into your 9.8% phase last year.
1. But... but... did you pay off your mortgage?
2. Have you seen Raddr's update of his hapless hypothetical Y2K ER?
Raddr's Early Retirement and Financial Strategy Board • View topic - Hypothetical Y2K retiree update
__________________
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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.
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01-09-2012, 05:34 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,298
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I appreciate anyone who shares actual experience, especially after more than a few years. More instructive than theory or speculation, though I understand that's often all we have. Thanks...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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01-09-2012, 05:38 PM
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#5
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Moderator Emeritus
Join Date: May 2007
Posts: 12,901
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It's remarkable. You withdrew about 38% of your initial portfolio value over the past 6 years and your portfolio value is barely down despite the worst economic crisis since the great depression!
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01-09-2012, 05:39 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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Quote:
Originally Posted by Nords
So the theory is that the worst is over and it's smooth sailing from here?
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Sure! I believe in fairy tales, too...
Quote:
Originally Posted by Nords
Does FIRECalc like your next 30 years just as much now as it did six years ago?
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A run with today's numbers gives a 95.5% success rate over 30 years - almost identical to my original numbers.
Quote:
Originally Posted by Nords
1. But... but... did you pay off your mortgage?
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Of course - and I delayed retirement 'just one more year' to do it.
Quote:
Originally Posted by Nords
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As I mentioned above, I'm into fairy tales not horror stories...
__________________
Numbers is hard
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01-09-2012, 05:46 PM
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#7
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Moderator Emeritus
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
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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.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.
As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
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01-09-2012, 05:50 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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Quote:
Originally Posted by REWahoo
A run with today's numbers gives a 95.5% success rate over 30 years - almost identical to my original numbers.
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On the bright side, most likely you won't need the full 30 years.
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Work is something you do to get enough $ so you don't have to....Me.
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01-09-2012, 05:52 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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Quote:
Originally Posted by Rich_in_Tampa
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.
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Did you take your SS yet Rich?
__________________
Work is something you do to get enough $ so you don't have to....Me.
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01-09-2012, 05:52 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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Quote:
Originally Posted by FIREd
It's remarkable. You withdrew about 38% of your initial portfolio value over the past 6 years and your portfolio value is barely down despite the worst economic crisis since the great depression!
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What's even more remarkable frightening is running that calculation and including our SS income. In 6.5 years we've spent an amount equal to 45% of our initial portfolio.
I suppose the only reason I'm not stocking up on cat food is the big run-up in the market during the first couple of years after I retired followed by the big recovery after the "unpleasantness" of 07/08.
__________________
Numbers is hard
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01-09-2012, 05:53 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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Ya think not?
__________________
Numbers is hard
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01-09-2012, 05:58 PM
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#12
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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I have only been retired a little over two years, but here is what I have so far.
I have no idea what my trend will be as I grow older. In a year and a half, I start Medicare (but in my case, my BCBS payments will remain the same, and I plan to add and pay for Medicare Part B so that is a net loss). Then at some point I will be getting SS for a gain in income. Just to add to the confusion, I am trying to let go of those pursestrings, and learn to expand my lifestyle.
As for how my portfolio is doing, by the end of 2011 it increased to 140% of its value at the end of 2008. As you can see in the chart below, most of that was during 2009, understandably since I was working and contributing to it for the first 10 months of 2009 and also the market was making great gains at that time. Since that time I have been withdrawing for living expenses. Still, I have seen modest increases in portfolio size every year so far.
My withdrawals so far:
2009: 0.0%
2010: 2.7% (= 1.8% plus 0.9% for house renovations for the move-that-never-happened)
2011: 2.2%
I am not looking forward to the (future) first time since retirement when my portfolio decreases from one year to the next. I know it will happen when we hit the next market slump.
FIRECalc thinks everything is rosier than rosy but reality is what you see below. Not bad, but not soaring either.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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01-09-2012, 06:00 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Quote:
Originally Posted by FIREd
It's remarkable. You withdrew about 38% of your initial portfolio value over the past 6 years and your portfolio value is barely down despite the worst economic crisis since the great depression.
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+1.
Ah, Bernicke's spending model will take over anyway. How much will a geezer retired gentleman spend while rocking his chair in the front porch?
PS. In a haste, I misread FIREd's post, and made a bad "edit" which I have removed. Apologies!
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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01-09-2012, 06:04 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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Quote:
Originally Posted by NW-Bound
Ah, Bernicke's spending model will take over anyway. How much will a geezer retired gentleman spend while rocking his chair in the front porch?
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It depends if he is on his front porch or the nursing homes front porch.
__________________
Work is something you do to get enough $ so you don't have to....Me.
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01-09-2012, 06:05 PM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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The gummint will take care of all of us.
And if it won't, for me, it will be a blessing. I like it to be quick!
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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01-09-2012, 06:06 PM
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#16
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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Quote:
Originally Posted by NW-Bound
The gummint will take care of all of us.
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Yup, right after all your money is gone.
__________________
Work is something you do to get enough $ so you don't have to....Me.
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01-09-2012, 06:15 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Very good results, Wahoo.
I don't have any figures. I may not even have year end networth figures. But so far, my only real setback was divorce, and the financial damage from that was to some extent made up by having more complete control over my outflow. Alone, I have nailed down quite a few loose boards that would have kept tripping me if I still had to coordinate with her
God willing, if today's conditions do not abruptly deteriorate going forward, now that I am drawing ss and have bought a condo for cash, I believe I should be able to live on 2%. I have no expensive hobbies and likely will not develop any. I'll actually have surplus cash flow just from dividends, partnership distributions and interest. I'd guess my main risk in the financial sphere would be a boneheaded investment error.
It really doesn't cost that much to live in a city center, if one's home is handled. I have a car, but could do fine without it.
Depending on how volatile markets are, and how well I can manage my tax obligation I may need to increase that WR by 0.5% or so. I have never achieved the ultra-low tax rates of some here. With many of my assets outside retirement accounts combined with a cash flow orientation, RMDs, and SS I think that I may never get below the 25% marginal rate, but it could happen!
Ha
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"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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01-09-2012, 06:48 PM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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Quote:
Originally Posted by W2R
My withdrawals so far:
2009: 0.0%
2010: 2.7% (= 1.8% plus 0.9% for house renovations for the move-that-never-happened)
2011: 2.2%
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I doubt anyone is going to be able to beat my first five year withdrawal percentages.
__________________
Numbers is hard
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01-09-2012, 06:54 PM
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#19
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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I am in awe of your accomplishments!! But hey, I'm getting there - - I don't do so well with change, so I'm taking it slowly but it will happen.
Then, with my luck the Dow will fall to 150 and stay there for 25 years.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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01-09-2012, 07:12 PM
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#20
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Administrator
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,124
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Quote:
Originally Posted by Midpack
I appreciate anyone who shares actual experience, especially after more than a few years. More instructive than theory or speculation, though I understand that's often all we have. Thanks...
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+1
Thanks very much for sharing, it is very interesting.
I've just come to the end of my 2nd year, and my situation is non-COLA pensions supplying 70% of target spending on year 1.
My WR and portfolio moves for the first 2 years are :
2010 0.0% - unexpected bonus from 2009 work
2011 1.14% - unexpected legacy from deaths of parents
2012 2.0% - projected
2013 2.16% - projected
Savings
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
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