Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Quick survey
Old 02-14-2015, 01:24 PM   #1
gone traveling
 
Join Date: Oct 2007
Posts: 1,135
Quick survey

For those that are fired early, say in your 40's or early 50's... before access to SS or tax deferred investments, do you base your withdrawal rate on only the investible assets that you can access now or on total investible assets? ( and am I correct to assume in both cases that your primary residence is excluded) ?

Just curious ... Polling..
__________________

__________________
papadad111 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-14-2015, 01:28 PM   #2
Recycles dryer sheets
Mo Money's Avatar
 
Join Date: Mar 2014
Location: .
Posts: 269
I am basing my withdrawal rate on total investible assets and do not count my primary residence.
__________________

__________________
“We always may be what we might have been.” -- Adelaide Anne Procter
Mo Money is offline   Reply With Quote
Old 02-14-2015, 02:42 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Amethyst's Avatar
 
Join Date: Dec 2008
Posts: 5,874
We don't qualify for SS, so don't plan for it. In addition, although I am under 59.5, I believe I could withdraw from my Thrift Savings and deferred annuities without penalty, if I wanted to.

For 2014 (first year I was retired), rather than use a withdrawal rate, we took dividends/capital gains in cash on investable assets.

We do not count our home equity, as to "withdraw" any of it would constitute debt.

Amethyst
__________________
If you understood everything I say, you'd be me ~ Miles Davis
'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
Amethyst is offline   Reply With Quote
Old 02-14-2015, 02:56 PM   #4
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,079
Not sure if 55 meets your definition of ER but I'm now into my 6th year and I always calculate my withdrawal % on my entire portfolio, even though for the first 4.5 years I was only allowed to withdraw penalty-free from after tax investments.

ETA
No primary residence included.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Old 02-14-2015, 02:56 PM   #5
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
I consider my cash (and cash equivalents such as my I-bonds) above and beyond my emergency fund to be part of my portfolio. If I have it, it's because I don't feel comfortable investing all of it based on current economic and market conditions. And though I'm not 59.5 yet, I keep 72T in the back of my mind.

My emergency fund is not a part of my portfolio. My excess cash is. And all of my retirement funds are.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 02-14-2015, 02:57 PM   #6
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,074
I based our withdrawals on what FIRECalc said was "safe", regardless of whether our assets could be accessed now or later.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 02-14-2015, 03:46 PM   #7
Recycles dryer sheets
 
Join Date: Sep 2009
Posts: 62
Not sure if 55 meets your definition of ER but I'm now into my 6̶t̶h̶ 3rd year and I always calculate my withdrawal % on my entire portfolio, even though for the first 4.5 years I w̶a̶s̶ am only allowed to withdraw penalty-free from after tax investments.

ETA
No primary residence included. __________________
__________________
SomedaySoon is offline   Reply With Quote
Old 02-15-2015, 12:08 AM   #8
gone traveling
 
Join Date: Oct 2007
Posts: 1,135
Thanks for feedback. I was really targeting those in their 40's....

For me it's a mental exercise. Tax deferred accounts at 59.5 and SS somewhere between 63 and 70 are both far enough out in the future that I was unsure of whether or not to include in initial asset base to calculate WD rate ...

I guess I am just being too conservative.
__________________
papadad111 is offline   Reply With Quote
Old 02-15-2015, 06:53 AM   #9
gone traveling
 
Join Date: Oct 2007
Posts: 1,135
55 in my opinion is on the edge between early retirement and normal retirement. Still early but it's close enough to being able to access tax deferred accounts and SS in my opinion (versus a decade + for those in their 40's) that those retirees here probably would consider both because the tax deferred stuff is on close reach - Others have mentioned 72t as an option which is a reasonable means of tapping tax deferred accounts.

So. Sounds like consensus is to include all investible assets regardless of taxable or tax deferred even when Retiring in 40's..

Don't include primary residence in WD rate calls is also clearly the consensus.

Thanks.
__________________
papadad111 is offline   Reply With Quote
Old 02-15-2015, 07:02 AM   #10
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,413
Total portfolio here as well. Not sure why you would exclude a tax deferred account, it's still part of the portfolio.
__________________
MichaelB is online now   Reply With Quote
Old 02-15-2015, 08:03 AM   #11
Thinks s/he gets paid by the post
 
Join Date: Jul 2012
Location: Mississippi
Posts: 1,878
I left megacorp @ 48. When planning I used total investible assets ( excluding house ).

I had about 60% in taxable accounts and live on the interest/dividends, I still have "reinforcements" coming down the road in a small pension then SS.
__________________
rbmrtn is offline   Reply With Quote
Old 02-15-2015, 08:25 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,407
Quote:
Originally Posted by papadad111 View Post
For those that are fired early, say in your 40's or early 50's... before access to SS or tax deferred investments, do you base your withdrawal rate on only the investible assets that you can access now or on total investible assets? ( and am I correct to assume in both cases that your primary residence is excluded) ?

Just curious ... Polling..
I was in my mid 50s but my withdrawals are based on what we needed to live given our lifestyle in retirement.

Whether our withdrawals were prudent or "safe" was based the relationship of our withdrawals to our total retirement assets and also factored in pensions and SS that came online later in retirement.

However, if you retire before 59 1/2 (whether at 40 or at 55) you need to add in another layer of analysis as to whether you have sufficient sources of penalty free accounts (such as taxable accounts or Roth contributions) that you can use to live on between ER and when you can access those tax-deferred funds (usually at 50 1/2 unless you do a 72t) or if you are willing to pay the penalty (I wouldn't).

I think most forum members do not include their primary residence unless they plan to sell or sell/downsize and effectively monetize some of that value. The benefit of owning you residence is reflected in your expenses and not having a rent payment.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 02-15-2015, 08:48 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,874
I base my safe withdrawal rate on current total portfolio plus any possible inheritances or anticipated lottery winnings.
__________________
Yes, I have achieved work / life balance.
travelover is offline   Reply With Quote
Old 02-15-2015, 09:35 AM   #14
Full time employment: Posting here.
 
Join Date: Nov 2009
Posts: 510
Retired at 58/56 (5+ years now). Decision to retire was based on total investments going forward (house excluded-no mortgage), and availability of taxable funds to cover time frame between RE and start of SS @ 62 (no pensions). Had set aside separate savings for years B/4 SS, but also accessed taxable accounts for dividend income.
__________________
fritz is offline   Reply With Quote
Old 02-15-2015, 09:41 AM   #15
Full time employment: Posting here.
VaCollector's Avatar
 
Join Date: May 2007
Posts: 544
Quote:
Originally Posted by travelover View Post
I base my safe withdrawal rate on current total portfolio plus any possible inheritances or anticipated lottery winnings.
__________________
VaCollector is offline   Reply With Quote
Old 02-15-2015, 12:46 PM   #16
Recycles dryer sheets
Choices's Avatar
 
Join Date: Jan 2015
Location: In transit
Posts: 154
Quote:
Originally Posted by travelover View Post
I base my safe withdrawal rate on current total portfolio plus any possible inheritances or anticipated lottery winnings.
Verrrry prudent! And you are somebody I should use as a mentor?
Just this week I heard a woman say she couldn't figure out how some people knew what numbers to pick in order to win the lottery.
__________________
Choices is offline   Reply With Quote
Old 02-15-2015, 12:55 PM   #17
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
Not only total portfolio, but total lifetime. I'm perfectly happy to withdraw from the portfolio at higher than long-term, portfolio-only "safe" rates for the 15 years or so that it will take to bring extra SS and pension income online. After age 70, portfolio withdrawals will be much lower. I can still get good FIRECalc results, even though I'm taking >4% initially.


If you're starting really early, like 40, I would want to stay much closer to the long-term portfolio-only safe withdrawal rates. I was early 50's when I jumped.
__________________
Animorph is offline   Reply With Quote
Old 02-15-2015, 01:02 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,874
Quote:
Originally Posted by Choices View Post
............
Just this week I heard a woman say she couldn't figure out how some people knew what numbers to pick in order to win the lottery.
The day after the drawing it is usually fairly obvious.
__________________
Yes, I have achieved work / life balance.
travelover is offline   Reply With Quote
Old 02-15-2015, 01:10 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 3,695
Quote:
Originally Posted by Alan View Post
Not sure if 55 meets your definition of ER but I'm now into my 6th year and I always calculate my withdrawal % on my entire portfolio, even though for the first 4.5 years I was only allowed to withdraw penalty-free from after tax investments.
Right. My approach was to take a "make up for it later" mindset by juggling withdrawal buckets as more resources became available over time.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 02-15-2015, 01:16 PM   #20
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 3,695
Quote:
Originally Posted by travelover View Post
I base my safe withdrawal rate on current total portfolio plus any possible inheritances or anticipated lottery winnings.
I'm suspect this was tongue in cheek, but, while I don't factor it into my planning, I do have a substantial inheritance coming my way at some (sad) point.

The assets are already in my name and I manage them -but the funds are only available to someone else- and I just have to wait for an ummm 'unfortunate trigger'...I'm beginning to wonder if I should start to consider it.

Serious question.
__________________

__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Nothing quick about getting rich with real estate sgeeeee FIRE and Money 60 04-05-2005 06:14 AM
Get Rich Quick! Ted Other topics 5 09-06-2003 08:10 PM
Quick Retirement Seminar Andy Molnar Other topics 5 08-23-2003 06:27 PM
Quick Retirement Seminar Andy Molnar Other topics 0 08-19-2003 07:01 PM

 

 
All times are GMT -6. The time now is 06:46 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.