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Old 12-12-2018, 08:04 PM   #1
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Mr. Pal and I are having a debate: he feels comfortable spending about 90% of what FIRECalc says we can. I'd prefer more like 70% given market projections, or 90% of what I-orp says, with my estimates of 3% stock and 2% fixed. He doesn't seem to get that I find the idea of cutting back comforting, not punitive, right now.
What do you folks do? Any idea what % of the FIRECalc projections you actually spend?
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Old 12-12-2018, 08:51 PM   #2
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Any idea what % of the FIRECalc projections you actually spend?
You'll get all sorts of answers, but in our case we've been retired almost 14 years and our spending has averaged roughly 110% what FIRECalc said we could spend should future returns be no worse than the past. We have no plans to cut back in the immediate future as our numbers still look good.

YMMV.
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Old 12-12-2018, 09:06 PM   #3
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We're spending what we need to spend. Firecalc gives us 100% with our spending... I haven't done to much investigation into spending more since we have a pretty comfortable lifestyle.

At the time we retired I think we were about 90% of what firecalc said we could spend. Since then the nest egg grew quite a bit - but if you follow the 4% (or 3% or 2%) rule, which is modeled as 'constant spending' in firecalc, you still base your withdrawals on the original nest egg ( adjusting spending for inflation.)

Obviously for those following the percent of remaining portfolio, or other variable withdrawal methods, it's different.

I might adjust spending upward, for a few years, when older son starts college next year, followed by younger son 2 years later... we'll have to see how far the 529's will stretch.
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Old 12-12-2018, 10:43 PM   #4
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FIREcalc doesn't do projections and it doesn't say what you can spend. It tells you what would have worked in the past.

I'm not sure if my answer should help you - it seems to me that you have a moderate difference of opinion with your partner that you'll have to work out with him. "See, 2Cor521 does what I think we ought to do!" is hopefully not a very valid argument since my goals and situation and contingency plans are likely different than yours. And that's true whether I would tend to be on your side or his side.

FWIW, I'm 49 with three kids near or in college and have been retired about 33 months. I spend about 1.5% net WR from my portfolio. Emotionally I would feel safe spending more - maybe up to 3% or so; I just don't do so for various reasons. Intellectually I think I should feel safe spending up to whatever FIREcalc would categorize as 95% safe - it is my opinion that the future will be better than the past. So to use your terminology, I spend about 27% of what I think is FIREcalc safe.
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Old 12-12-2018, 11:02 PM   #5
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We are probably spending a lot less than firecalc says, about 66%.
I find it very freeing, knowing we can just grab some vacation opportunity deal the comes our way, since we have a lot of slack in the budget.
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Old 12-13-2018, 12:10 AM   #6
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First -- what SecondCor521 said.

When you say what FireCalc says you can are you using 100% or something less. I assume based on your question you are using 100%.

Personally if I was looking at a number based on upon 100% I would feel comfortable spending that. DH, FWIW, feels fine with a number based on 80%. I want 95%. So there's that. I would, however, evaluate things every year.
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Old 12-13-2018, 04:40 AM   #7
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We spend much less than we could and like the OP, I find this comforting. I like to SWAN.


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Old 12-13-2018, 06:39 AM   #8
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Using Firecalc at maximum spending while maintaining 100% success, for our first year of retirement, we will spend about 80% at current market levels.
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Old 12-13-2018, 07:11 AM   #9
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Unless we have an expensive emergency before year-end, I project we will spend 50% of FIRE maximum spending this year. (And that included splitting a bottle of Veuve Clicquot for a birthday this month.)

+ 1 for those who said
You need to be comfortable with your lifestyle and risk tolerance, and it's almost certainly different than mine.
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Old 12-13-2018, 07:23 AM   #10
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these retirement planners give you warm fuzzies, no one is insuring the results (backed with $). However, if you are getting 95% to 100% and your input is realistic, you will likely be leaving lots of $ on the table. Look at the methodology.

Do what you feel comfortable. Be flexible in down times. This is not modeling an engineering problem where the physics provides a solid answer.
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Old 12-13-2018, 07:33 AM   #11
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First three years we spent well under 2%, this year I bumped it to 3.5%, and next year will be 3.5% as well. Portfolio was doing well up until this latest correction, but it still up 8% from October 2014.
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Old 12-13-2018, 07:47 AM   #12
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If you trust FIRECalc, then you max out and spend 100% of what it tells you gives you 100% success.

If you don't trust FIRECalc, then you do whatever you feel comfortable with. It's a matter of personal preference.
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Old 12-13-2018, 07:54 AM   #13
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FIREcalc doesn't do projections and it doesn't say what you can spend. It tells you what would have worked in the past.
I completely agree with you. Many, many folks on this site either do not understand that, or theorize that if they stick with what FIRECalc indicates would be 100% success (based on past results), even if things do not go according to plan, they will not end out too badly.

I am a pessimist by nature when it comes to models like FIRECalc. However, it gives many folks the warm fuzzies - if it works for them, wonderful.
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Old 12-13-2018, 07:54 AM   #14
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Our spending has varied a lot since retiring 5 years ago. Compared to the figure FIRECalc generates at 95% success rate, our lowest year was 60% and the highest (this year) is shaping up to be around 93%. I was inspired to "Blow that Dough!" Our average is 78%.
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Old 12-13-2018, 08:36 AM   #15
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Originally Posted by palomalou View Post
Mr. Pal and I are having a debate: he feels comfortable spending about 90% of what FIRECalc says we can. I'd prefer more like 70% given market projections, or 90% of what I-orp says, with my estimates of 3% stock and 2% fixed. He doesn't seem to get that I find the idea of cutting back comforting, not punitive, right now.

What do you folks do? Any idea what % of the FIRECalc projections you actually spend?


I agree with you. Security all the way for me.
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Old 12-13-2018, 09:41 AM   #16
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I am shooting for about 70% of the spend at the 100% success rate.
That's my buffer to absorb one off's.
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Old 12-13-2018, 10:04 AM   #17
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DW packs it in for good come November 2019 so we are not yet in SWR calculations. But our planning has always been based on our known expenses. We are insured for any calamities and have plenty of cushion in our budget for unusual expenses.

I don't foresee changing anything significant. Only possible exception would be a long, drawn out, recession where we might take a simpler beach vacation to Florida as opposed to some more exotic vacation.
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Old 12-13-2018, 12:12 PM   #18
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I completely agree with you. Many, many folks on this site either do not understand that, or theorize that if they stick with what FIRECalc indicates would be 100% success (based on past results), even if things do not go according to plan, they will not end out too badly.

I am a pessimist by nature when it comes to models like FIRECalc. However, it gives many folks the warm fuzzies - if it works for them, wonderful.
For those of us like myself who look at many calculators even in retirement, we do understand the above. Yes, it is just a guideline, but if one runs it each year and the results are "good" and when one is comfortable with their WR%, then the results bear out the plan in its current status.
Stress testing for further losses also assist in the comfort zone.
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Old 12-13-2018, 12:26 PM   #19
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I ran FIRECalc out to age 117 (the age of the oldest living human, call me an optimist! ), at 100% with my nest egg never dropping below $400K.

My projected spending this year is 51% of what FIRECalc says I can spend. I am not saying this to brag because it's not a result of my great virtue or anything like that. It's due to the incredible 10 year bull market, coupled with my resistance to change, and no unusual big expenses this year so far.

I will be self-funding any future LTC costs, and I do not wish to die broke. Still, I could probably be spending more if I wanted to do so. I am age 70 right now.

Anyway, I don't feel bad about buying those shoes from Amazon this week.
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Old 12-13-2018, 12:39 PM   #20
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I ran FIRECalc out to age 117 (the age of the oldest living human, call me an optimist! ), at 100% with my nest egg never dropping below $400K.

My projected spending this year is 51% of what FIRECalc says I can spend. I am not saying this to brag because it's not a result of my great virtue or anything like that. It's due to the incredible 10 year bull market, coupled with my resistance to change, and no unusual big expenses this year so far.

I will be self-funding any future LTC costs, and I do not wish to die broke. Still, I could probably be spending more if I wanted to do so. I am age 70 right now.

Anyway, I don't feel bad about buying those shoes from Amazon this week.
We have seen your yearly spending W2R and you might just be an LBYMer for life.
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