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12-12-2018, 07:04 PM
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#1
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Recycles dryer sheets
Join Date: Dec 2010
Posts: 445
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% of "allowed"
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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12-12-2018, 07:51 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: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,000
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Quote:
Originally Posted by palomalou
Any idea what % of the FIRECalc projections you actually spend?
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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.
__________________
Numbers is hard
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12-12-2018, 08:06 PM
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#3
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Moderator
Join Date: Apr 2012
Location: San Diego
Posts: 14,140
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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.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 6%, rental income 20%
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12-12-2018, 09:43 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: Jun 2006
Location: Boise
Posts: 7,863
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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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"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
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12-12-2018, 10:02 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 16,973
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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.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
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12-12-2018, 11:10 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: Jul 2009
Posts: 5,307
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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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12-13-2018, 03:40 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Posts: 2,518
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We spend much less than we could and like the OP, I find this comforting. I like to SWAN.
Sent from my iPad using Early Retirement Forum
__________________
"Luck favors the prepared mind"
Pasteur
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12-13-2018, 05:39 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,197
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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.
__________________
TGIM
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12-13-2018, 06:11 AM
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#9
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Recycles dryer sheets
Join Date: May 2013
Posts: 327
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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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12-13-2018, 06:23 AM
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#10
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Thinks s/he gets paid by the post
Join Date: Dec 2014
Posts: 2,509
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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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12-13-2018, 06:33 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Sep 2014
Location: The Great Wide Open
Posts: 3,779
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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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12-13-2018, 06:47 AM
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#12
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Thinks s/he gets paid by the post
Join Date: Mar 2012
Posts: 3,925
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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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12-13-2018, 06:54 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Mar 2012
Posts: 3,925
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Quote:
Originally Posted by SecondCor521
FIREcalc doesn't do projections and it doesn't say what you can spend. It tells you what would have worked in the past.
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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.
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12-13-2018, 06:54 AM
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#14
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Thinks s/he gets paid by the post
Join Date: Jul 2012
Location: Texas
Posts: 3,024
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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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Retired at 52 in July 2013. On to better things...
AA: 85/15 WR: 2.7% SI: 2 pensions, SS later
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12-13-2018, 07:36 AM
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#15
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Thinks s/he gets paid by the post
Join Date: Mar 2007
Location: Nebraska
Posts: 1,543
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Quote:
Originally Posted by palomalou
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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I agree with you. Security all the way for me.
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12-13-2018, 08:41 AM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2016
Location: Colorado
Posts: 8,971
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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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12-13-2018, 09:04 AM
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#17
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Thinks s/he gets paid by the post
Join Date: Jan 2011
Location: Fair Lawn
Posts: 2,936
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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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12-13-2018, 11:12 AM
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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: Jan 2018
Location: Tampa
Posts: 11,197
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Quote:
Originally Posted by njhowie
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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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.
__________________
TGIM
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12-13-2018, 11:26 AM
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#19
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,468
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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.
__________________
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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12-13-2018, 11:39 AM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,197
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Quote:
Originally Posted by W2R
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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We have seen your yearly spending W2R and you might just be an LBYMer for life.
__________________
TGIM
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