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View Poll Results: Retirees only: what's your withdrawal scheme?
Classic: fixed percentage of initial stash + annual inflation adjustment 14 11.11%
95% rule 4 3.17%
Bernicke 2 1.59%
Guyton 3 2.38%
*****ian P/E10 0 0%
Gummy sensible withdrawal 6 4.76%
Whatever interest + dividends I get 9 7.14%
Capped at roughly 4% of current stash 20 15.87%
God takes care of fools like me 5 3.97%
Other (explain) 12 9.52%
I'm not retired, but I love polls! 51 40.48%
Voters: 126. You may not vote on this poll

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Re: Poll: What's your withdrawal scheme?
Old 01-20-2007, 10:27 AM   #41
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Re: Poll: What's your withdrawal scheme?

Quote:
Originally Posted by wab
Just to clarify the options, the "roughly 4% cap" option was intended to capture your scheme. You can withdraw well under 4% as longer as you're capping it at some "sane" level. That's what I do too.
Yes, that's how I interpreted that option. I take less than 4% and hopefully can continue withdrawing < 3% if possible, but I would never take out more than 4% of each beginning year value - that's the hard limit on withdrawals.

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Re: Poll: What's your withdrawal scheme?
Old 01-20-2007, 11:20 AM   #42
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Re: Poll: What's your withdrawal scheme?

Quote:
Originally Posted by audreyh1
Yes, that's how I interpreted that option. I take less than 4% and hopefully can continue withdrawing < 3% if possible, but I would never take out more than 4% of each beginning year value - that's the hard limit on withdrawals.

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Am I the "profit" in the wilderness? What is everyone saving it for


If you follow FIRECalc with a 3% withdrawl, the ending portfolio will be many times what you start with. When the term "end" is used, it reflects you being dead.

If you only "want" to spend 3%, you're in good shape. If you are limiting travel and other pleasures, you are starting to move up the miser scale.
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Re: Poll: What's your withdrawal scheme?
Old 01-20-2007, 12:01 PM   #43
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Re: Poll: What's your withdrawal scheme?

Quote:
Originally Posted by paradiseken
Actually, we are not miserly or depraived and will spend in retirement. I just want to try an experiment this first year of really limiting our withdrawals. It's like holding one's breath for as long as one can. When the pressure gets too great, I'll increase our withdrawals. I just want to see what our needs really are.
I will consider your efforts to be my behavior lab. You can report back from the other side and I will assume, "if they can do it, we could too in the event..." In the meantime we will keep livin the life.
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Re: Poll: What's your withdrawal scheme?
Old 01-20-2007, 12:23 PM   #44
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Re: Poll: What's your withdrawal scheme?

Quote:
Originally Posted by donheff
I will consider your efforts to be my behavior lab. You can report back from the other side and I will assume, "if they can do it, we could too in the event..." In the meantime we will keep livin the life.
Okay Don, I give up. I guess LBYM is a hard habit to break. It's almost becoming an obsession now. I need to loosen up. I think I'll go out this afternoon and buy that Z06. Oh wait, I have a '76 MGB that I need to sell first.
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Re: Poll: What's your withdrawal scheme?
Old 01-20-2007, 12:40 PM   #45
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Re: Poll: What's your withdrawal scheme?

Quote:
Originally Posted by 2B
Am I the "profit" in the wilderness? What is everyone saving it for


If you follow FIRECalc with a 3% withdrawl, the ending portfolio will be many times what you start with. When the term "end" is used, it reflects you being dead.

If you only "want" to spend 3%, you're in good shape. If you are limiting travel and other pleasures, you are starting to move up the miser scale.
We are not limiting our lifestyle, not limiting travel or other pleasures. We simply don't spend as much as our portfolio would let us spend. We already own all the "toys" we want. We have been traveling extensively since 1999.

Confession - in 2006 we spent an average of $850/month on eating out.

We are also young. I'm 47, DH is 51.

What are we saving it for? Well for one thing, we might have to pick up the tab for elderly/ill parents. It's nice to have a cushion available for that. We are currently paying for medical expenses for one parent. For a while there it was looking like that would hit us a lot harder than it eventually did!

We also will self-insure for LTC.

When we get past where family/parents might need the financial support, then we'll be more aggressive about charitable donations. Right now family is our charity!

Audrey
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Re: Poll: What's your withdrawal scheme?
Old 01-20-2007, 01:01 PM   #46
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Re: Poll: What's your withdrawal scheme?

I ain't there yet, but I favor Galeno's simple scheme. Portfolio 100% in equities (but not quite!). Take a flat 4% of the pot out each year and put it into a CD ladder and evetually a mm fund. Let the market take care of inflation.

Realistically, it will be a 72T-type withdrawal, since all of my stash is in IRAs. Nords has a scheme to pull it out, but I haven't figured it all out yet.
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Re: Poll: What's your withdrawal scheme?
Old 01-20-2007, 03:56 PM   #47
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Re: Poll: What's your withdrawal scheme?

Quote:
Originally Posted by 2B
. . . When the term "end" is used, it reflects you being dead.

. . .
Wait a minute. Nobody ever told me that. Is that what this retirement thing leads to? Death? I thought we were all going to kayak into the sunset wrapped in warm dryer sheets.
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Re: Poll: What's your withdrawal scheme?
Old 01-20-2007, 07:56 PM   #48
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Re: Poll: What's your withdrawal scheme?

I'm theoretically using the 95% Rule but until hard times come it's the same as the Roughly 4% of Portfolio Rule. Let's hope it stays that way for awhile... The last 4 years have been awfully kind...

Audrey, hats off to you for finding a nice 3%+/- equilibrium where you don't need more and your spending is stable, while still having tons of fun. And don't stop eating out if you're finding good food out there. If I were on long-term RV status I'd just view meals out as one of those expenses like oil or gas.
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Re: Poll: What's your withdrawal scheme?
Old 01-20-2007, 09:38 PM   #49
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Re: Poll: What's your withdrawal scheme?

Not retired yet, but I was planning on using the KM rule

I created a spreadsheet a few years ago - one row per year. I plugged in our savings. I give them a conservative 5% annual growth (which we have exceeded to date, as we are 70/30, but moving to 65/35 in the next few years....). Then I determined a retirement budget based on what we spent each year. I added in some nice healthy vacations, increased the medical line item, etc. I inflate that by 3% each year. Then, starting the year we retire, I determined how much we would need to withdraw each year, after our pensions. I don't factor in SS....as who knows where it will be when I am 65. Anyway, if it says I can live to 100 and still have money, I am happy. It does.....so I am happy.

I went back and looked. It is about 2.5% -3% until we are 80 and then it goes to 4-5+%. Being an overly conservative view, we should be fine. And it is always fun to play with and say "Gee, I could really retire next year, if I wanted to ...." and "Hmm...if we get 8% we can go on 2 cruises each year" :P



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Re: Poll: What's your withdrawal scheme?
Old 01-20-2007, 10:23 PM   #50
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Re: Poll: What's your withdrawal scheme?

Quote:
Originally Posted by ESRBob
And don't stop eating out if you're finding good food out there. If I were on long-term RV status I'd just view meals out as one of those expenses like oil or gas.
That's what it basically comes down to. I enjoy cooking (especially in nice outdoor weather), but when we are visiting an area where there are a lot of nice restaurants (especially when there are yummy regional specialties), it just seems silly to cook! And there are other times like being in transit or having MH service done where cooking becomes inconvenient.

Occasionally we get "stuck" somewhere with absolutely no decent restaurants, and then our grocery bills go sky high! LOL! I think because we do go through periods where we are somewhere with only bad restaurant choices (sometimes really bad), we tend to overdo it when we find a location with good restaurants!

We visited a friend near Lafayette LA last February and ended up extending our stay because there were just too many great places to eat! Them Cajuns sure have a fine cuisine!

Audrey
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Re: Poll: What's your withdrawal scheme?
Old 01-20-2007, 11:15 PM   #51
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Re: Poll: What's your withdrawal scheme?

Quote:
Originally Posted by KM
Not retired yet, but I was planning on using the KM rule

I created a spreadsheet a few years ago - one row per year. I plugged in our savings. I give them a conservative 5% annual growth (which we have exceeded to date, as we are 70/30, but moving to 65/35 in the next few years....). Then I determined a retirement budget based on what we spent each year. I added in some nice healthy vacations, increased the medical line item, etc. I inflate that by 3% each year. Then, starting the year we retire, I determined how much we would need to withdraw each year, after our pensions. I don't factor in SS....as who knows where it will be when I am 65. Anyway, if it says I can live to 100 and still have money, I am happy. It does.....so I am happy.

I went back and looked. It is about 2.5% -3% until we are 80 and then it goes to 4-5+%. Being an overly conservative view, we should be fine. And it is always fun to play with and say "Gee, I could really retire next year, if I wanted to ...." and "Hmm...if we get 8% we can go on 2 cruises each year" :P
I hope you don't leave too much on the table with this method.
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Re: Poll: What's your withdrawal scheme?
Old 01-21-2007, 10:25 AM   #52
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Re: Poll: What's your withdrawal scheme?

We buy what we want and dont limit our spending...it is about a 3% withdrawal rate.


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Re: Poll: What's your withdrawal scheme?
Old 01-21-2007, 04:57 PM   #53
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Re: Poll: What's your withdrawal scheme?

Quote:
Originally Posted by jdw_fire
I hope you don't leave too much on the table with this method.
Actually, I am kinda hoping/planning on it. My daughter was diagnosed with diabetes are age 9. I never want her to want for medical care or supplies because she can't afford it. I've seen too much of that. I plan/hope to leave both of my children quite comfortable.

But don't worry, I have factored in some pretty hefty vacation money in our budget. If I get travel a lot, I will be very happy.
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Re: Poll: What's your withdrawal scheme?
Old 01-23-2007, 12:17 PM   #54
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Re: Poll: What's your withdrawal scheme?

Divide mixed portfolios and after tax fixed pensions annually over IRS life expectancies.
Spend the lesser of the new annual division or the previous year’s division plus inflation.
Withdrawal varies with portfolio value, but stable cash from pensions, bonds, dividends.

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Re: Poll: What's your withdrawal scheme?
Old 01-23-2007, 07:39 PM   #55
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Re: Poll: What's your withdrawal scheme?

I am not retired yet, but planning to use the ESPlanner to determine an appropriate annual consumption rate. My latest results show 4% of portfolio assets at retirement. This assumes that I'll supplement my earnings with SS# when eligible, and have some regular special expenses like buying a car every 10 years.

Since all the results are in a spreadsheet, I think I can keep track of it. I haven't figured out a scheme for selling assets to fund the withdrawals.

Is anyone else here using ESPlanner?

I agree with some of the posts - I don't find a direct correlation between spending money (after the bare essentials) and enjoyment, so I do foresee years (or at least months) where I spend less than I have planned for.
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Re: Poll: What's your withdrawal scheme?
Old 01-23-2007, 09:08 PM   #56
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Re: Poll: What's your withdrawal scheme?

Walkinwood,

The easiest way I've found to fund spending with selling assets is to set a percent of cash into your annual rebalancing. Let's say you're a trusting soul who doesn't much care to set aside any cash for emergencies, but you know you need to spend 4% of your portfolio this year. Your historical analysis tells you that you'll earn 2% of your portfolio value in cash dividends and interest in your taxable accounts (where you can get access to it) and that you'll likely have 1% capgains distributions which you also wisely no longer automatically reinvest, but which instead you route to your money market account.

So on Jan 1, you have zero dollars in your MM, but you are about to do your rebalancing. Set the Cash/Money Market asset class to 1% and then go about rebalancing that along with all the other asset classes with their various weights in your portfolio. Complete your trades/rebalancing and you'll find 1% in that money mkt account -- the right things will have been bought and sold, and the right amount left in MM. Over the course of the year, the other 3% will trickle in and you'll have spending money the year through, while having kept trades to a minimum, and keeping the maximum amount of your capital at work in higher-expected-earnings asset classes throughout the year.

As a practical matter, much of your cash distributions or dividends may show up in December, so play with this system to meet your own cashflow needs and portfolio's behavior. I put 2% in my MM every January and it always sees me through the year, despite the fact that a decent chunk of my assets are still automatically reinvested.
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