Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: Return more than planned
Old 12-07-2006, 04:55 PM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dawg52's Avatar
 
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 7,434
Re: Return more than planned

Quote:
Originally Posted by Cut-Throat
Sam, I agree with you on this. Most would end up with a lot of money on the table.

Last month Master Blaster explained how delaying Social Security to age 70 allowed you to increase your SWR significantly during your late 50's and 60's (when you'd really like to spend it) - With a 80% + Increase in S.S. coming at age 70 it allows you to spend a lot of your portfoilo, with the knowledge that the bigger S.S. check is coming for your later years. This is probably a lot safer than taking a SWR of 4% and S.S. at age 62. - If you have that option, I'd look into it. For me it's a slam dunk to delay to age 70! - Oh and we're not talking peanuts here either. I think for myself it worked out to around $350,000 extra to be spent from age 62-70 and be in the same retirement postion as talking S.S. at age 62.

By the time I hit 80, I am pretty sure that spending money will not be as fun as it is now!
I'm warming up to the idea. Retiring in a few months at age 52. I will have to see how well my portfolio holds up between now and 62. If it is in decent shape, I may delay my SS as well.
__________________

__________________
Retired 3/31/2007@52
Full time wuss.......
Dawg52 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!

Re: Return more than planned
Old 12-07-2006, 06:23 PM   #22
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
Re: Return more than planned

I've been trying to figure out how to meld Bernicke with Guyton. Guyton lets you start at about 6% but then adjust withdrawls based on inflation and portfolio performance. This reduces the "residual portfolio" but runs the risk of cutting real spending to less than half of the initial withdrawl if the market tanks for a few year. Bernicke assumes a tail off in spending as one ages so "natural" spending declines anyway.

I don't won't to die with $12MM but I don't want to enjoy a Medicaid nursing facility either.
__________________

__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Re: Return more than planned
Old 12-07-2006, 06:56 PM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Re: Return more than planned

Quote:
Originally Posted by justin
How do you SWR = 4%+ inflation only folks plan on taking advantage of swelling portfolio balances, if at all? Not that there is anything wrong with this approach, just overly conservative for me.
I built enough discretionary spending into my budget and 4% plus inflation SWR plans that I'll be having fun regardless of market conditions. If, after several years, things are really looking very, very good, I'll figure out then how to handle the situation. And happily!

For now, I do my own testing by assuming I retired just before a down few years in the market, say in 2000, and draw my conclusions from that. Or better yet, run FIRECALC and plug 1966 as your first year of retirement. Then check the graph that shows terminal portfolio values. Yep...... in a couple of years you go negative. In others you have a ton of money. Lot's of variability. We all want to avoid going negative but somehow harvest the possible generously favorable outcomes. But it's hard to have your cake and eat it too.

Everyone has their own priorities. We felt we wanted to be able to have our plans and dreams manifest even if the markets go against us early on. If we're lucky and the markets are good to us in the first few years, why that's a problem I'll be more than happy to work on!!

The variable schemes seem too conservative for me. Given the first years of retirement being hit with significant portfolio losses and staggering inflation, we still want to do what we planned. Tightening our belts to 50% or less of our planned WR would suck.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Re: Return more than planned
Old 12-07-2006, 09:02 PM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Re: Return more than planned

Quote:
Originally Posted by youbet
If the 70's happens again, and it might, we won't be canceling travel, entertainment, dining out or other discretionary spending because we tested our plans using FIRECALC which includes challenging time periods.

My point is that in periods of diminishing portfolio value and high inflation, the 4% plus inflation of the original portfolio value plan is more liberal than your 5% - 6% of the previous years balance plan.

We paid a price for this and worked extra years, but hey, you pay your money and you takes your chance!
youbet,
I understand and appreciate why you've taken this position, and I'm NOT trying to argue against it. Still, it wouldn't work for DW and me. I've imagined how I'd feel if inflatonhit double digits again and if the stock market dropped 25% plus. The newspapers full of stories on the has-been US economy. Other countries beating us in the economic arena. US currency devaluing. Given al this, I know I would not continue wioth the same spending rate and take comfort in the fact that, if history is a guide, the markets would rebound in time to save us. If we DID take that trip to Europe as doom gripped the economy and our portolio plummeted, we wouldn't enjoy it much ("Hey, 10 Euros for a crepe? Forget it! I'll need that to buy 10 cans of beans in two more years."). Our pension covers the essentals, and our withdrawals from savings will be 4% of year-end totals. Even at that, I suspect we'll tighten our belts if things go south fro more than a year or two. It's all about marginal utility--the first $5k per year in discretonary spending buys a lot more fun per buck than the $25-$30k increment.
Again, I understand your reasoning, but it wouldn't work for us.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Re: Return more than planned
Old 12-07-2006, 10:15 PM   #25
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
Re: Return more than planned

Quote:
Originally Posted by donheff
Well, someone with a strong stomach can take as much as they want out of good times and "start fresh" the next year. Lets use $1M as an example with 3% inflation as the expectation. The basic plan is to be able to pull 4% ($40K) inflation adjusted (i.e. a 4% SWR). In year 1 you get a bonanza - 12% returns = $120,000. Leave $30K in the pot to adjust the $1M for inflation and spend $90K (or spend $60K and put $30K into your mad money pot for bad years ahead). Start year 2 fresh with a $1,030,000 portfolio and plan for the magic 4% SWR.
Donheff, I agree with this foolproof plan. Excellent job explaning it.

However, I don't think the "someone with a strong stomach" clause is necessary. If your plan is followed, there is no risk introduced into the equation at all.

Quote:
Originally Posted by Cut-Throat
Sam, I agree with you on this. Most would end up with a lot of money on the table.

Last month Master Blaster explained how delaying Social Security to age 70 allowed you to increase your SWR significantly during your late 50's and 60's (when you'd really like to spend it) - With a 80% + Increase in S.S. coming at age 70 it allows you to spend a lot of your portfoilo, with the knowledge that the bigger S.S. check is coming for your later years. This is probably a lot safer than taking a SWR of 4% and S.S. at age 62. - If you have that option, I'd look into it. For me it's a slam dunk to delay to age 70! - Oh and we're not talking peanuts here either. I think for myself it worked out to around $350,000 extra to be spent from age 62-70 and be in the same retirement postion as talking S.S. at age 62.

By the time I hit 80, I am pretty sure that spending money will not be as fun as it is now! So this was a true Epiphany to me!
Thanks CT. You are a lot more optimistic about longevity than me. I plan to withdraw SS as soon as possible. I did some calculation, and came to the conclusion that it's not beneficial for me to delay SS. I have absolutely no plan to live beyond 85 On top of that, I believe I would need a lot lot less once I reach 75. Not pessimistic, just realistic, in my opinion.
__________________
Sam is offline   Reply With Quote
Re: Return more than planned
Old 12-07-2006, 10:31 PM   #26
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Re: Return more than planned

Quote:
Originally Posted by samclem
It's all about marginal utility--the first $5k per year in discretonary spending buys a lot more fun per buck than the $25-$30k increment. Again, I understand your reasoning, but it wouldn't work for us.
That "marginal utility" perfectly expresses our thoughts. Part of it comes from years of working too hard to spend it, and another part comes from learning to live in conditions that even federal prisoners don't have to tolerate. I just can't flip a switch in my psyche and feel good about spending a few hundred extra a month-- on what?

Let's say that we can spend 4%/year. If we bumped our spending up to 5%, what would we spend that extra 1% on!?! Certainly not more possessions or obligations. Upgrading the bathroom-door décor or the landscaping might work for a couple years. Even flying first-class and paying retail prices for cruise tickets might not soak up the excess. Visiting neighbor islands an extra time or two each year? Eating pizza twice a week?

The things we enjoy at this stage of our lives don't seem to cost a lot of money, but it's not a problem. I'd rather have $12M in my pocket the day we check into the full-care facility, complete with a heated lap pool & Thai massages, and leave the leftovers (if any) to charity.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: Return more than planned
Old 12-07-2006, 10:37 PM   #27
Thinks s/he gets paid by the post
Bikerdude's Avatar
 
Join Date: Jul 2006
Posts: 1,901
Re: Return more than planned

Quote:
Originally Posted by samclem
youbet, I've imagined how I'd feel if inflatonhit double digits again and if the stock market dropped 25% plus. The newspapers full of stories on the has-been US economy.
I think this is the real issue. How will we all react to a down market cutting our nest egg in half? Now the 4% Firecalc assumption is "stay the course" history is on our side. : I just question how many of us (me included) will not cut back in the face of this. Everything looks good on paper but reality is way different IMHO.
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
Bikerdude is offline   Reply With Quote
Re: Return more than planned
Old 12-08-2006, 07:10 AM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,638
Re: Return more than planned

Quote:
Originally Posted by Sam
Donheff, I agree with this foolproof plan. Excellent job explaning it.

However, I don't think the "someone with a strong stomach" clause is necessary. If your plan is followed, there is no risk introduced into the equation at all.
The reason I mentioned the intestinal fortitude is that, if you spend the extra money and restart very year, the chances are good that you are eventually going to be "starting" retirement in a bad year. Thus you get to test SWR theory with a bad start. Of course, if you save up a pool of "mad money" you should be able to flatten out the downside.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Re: Return more than planned
Old 12-08-2006, 07:59 AM   #29
 
Posts: n/a
Re: Return more than planned

Quote:
Originally Posted by Sam
Thanks CT. You are a lot more optimistic about longevity than me. I plan to withdraw SS as soon as possible. I did some calculation, and came to the conclusion that it's not beneficial for me to delay SS. I have absolutely no plan to live beyond 85 On top of that, I believe I would need a lot lot less once I reach 75. Not pessimistic, just realistic, in my opinion.
I used to look at the problem, the way you are looking at it. But the revelation to me was that I get to spend more money in my 60's by delaying S.S. - You are thinking in terms of delayed S.S. = Delayed Spending (this is not true at all). I could care a less if I live to 80. By delaying S.S. you can increase your withdrawal rate in your late 50's and 60's to over 8% or more, without affecting the safety of your portfoilo. Think about the following example a bit. A quote from a post by masterblaster:

The difference in this example for someone retiring at 70 versus 62 is $1188 per month or $14256/year.

Now using the 4 percent safe withdrawal rate I need $25 of nest-egg for each dollar of yearly income. But if I start SS at 70 I need $14k/year less income than if I start at 62. Therefore I can spend out of my nest-egg 25 times that $14k/year increase in my SS payment. My calculations show that I could spend my nest-egg down by around $356k (total) and still be in the same retirement position. Or put another way I could spend my nest-egg down by around $44.5k/year over the period from when I am 62 to when I am 70 and still be in the same position.

Add in the value of not paying the double taxation on that $356k and that's worth maybe another $30-$70k or more.
__________________
  Reply With Quote
Re: Return more than planned
Old 12-08-2006, 08:03 AM   #30
Thinks s/he gets paid by the post
ladelfina's Avatar
 
Join Date: Oct 2005
Posts: 2,713
Re: Return more than planned

Hmm.. but if you have run your Firecalc that says your egg has 100% chance of success at a 4% SWR, then should one not feel "free" to spend the excess?

Looking at donheff's "resetting" scenario, isn't the 'starting in a bad year' factored in to the Firecalc.. (the "s" in "swr")??
..or should we all be thinking about an even "worse" worst-case scenario??

I am struggling with this right now, because, yes, our everyday expenses (pizza included) are relatively low, BUT there are a handful of $$$ fantasy house projects that I would love to throw (let's say) $100+k at. Our portfolio this year has 'made' that extra $100k above and beyond normal expenses. Do I crack open the piggy bank? I'm conflicted...
__________________
ladelfina is offline   Reply With Quote
Re: Return more than planned
Old 12-08-2006, 08:26 AM   #31
Recycles dryer sheets
 
Join Date: Feb 2005
Posts: 454
Re: Return more than planned

There is an issue with starting fresh each year, as if retiring on the current portfolio. Like the first post said, excess return is needed for the bad years.

If Trinity/Firecalc/your spreadsheet says that 4% would have worked 95% of the time for you, but then every year you start over, then you keep trying to find the 5% failure rate.

Even if you see a 100% chance of success, don't forget that the future might be different from the past. Maybe we got lucky in past hard times like 196x-198x, and the next one will be worse. Perhaps in 2017, the true SWR will be 3.4%. If you increase withdrawal to 4% again, you'd be set up for failure, along with the 2017 retirees who start at 4%. But the 2010 retirees who didn't adjust upwards (or didn't adjust too much) would be fine.

If the spending increases are luxuries, and you would be fine cutting back spending to 2-3% of current portfolio, then I suppose that should work out fine. Unless markets were in a superbubble, or risk premiums had permanently dropped to a very low level.
__________________
lazyday is offline   Reply With Quote
Re: Return more than planned
Old 12-08-2006, 08:36 AM   #32
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Re: Return more than planned

Quote:
Originally Posted by samclem
youbet,
I understand and appreciate why you've taken this position, and I'm NOT trying to argue against it. Still, it wouldn't work for DW and me. I've imagined how I'd feel if inflatonhit double digits again and if the stock market dropped 25% plus. The newspapers full of stories on the has-been US economy. Other countries beating us in the economic arena. US currency devaluing. Given al this, I know I would not continue wioth the same spending rate and take comfort in the fact that, if history is a guide, the markets would rebound in time to save us. If we DID take that trip to Europe as doom gripped the economy and our portolio plummeted, we wouldn't enjoy it much ("Hey, 10 Euros for a crepe? Forget it! I'll need that to buy 10 cans of beans in two more years."). Our pension covers the essentals, and our withdrawals from savings will be 4% of year-end totals. Even at that, I suspect we'll tighten our belts if things go south fro more than a year or two. It's all about marginal utility--the first $5k per year in discretonary spending buys a lot more fun per buck than the $25-$30k increment.
Again, I understand your reasoning, but it wouldn't work for us.
Well stated samclem.

Let me emphasize that it's our PLANS that call for a more or less constant WR, despite market conditions and time frame. But we assume a "rational man" approach to all this and reserve the right to modify things as we go if appropriate.

We waited until our late 50's to retire and postponed some activities that we're busy enjoying now. Our financial plans are quite conservative. Therefore, especially in the first few years while we still have health and vigor, it would take quite a setback in financial conditions for us to bail out of our desired spending.

But I can hypothesize possible future situations where we might change that outlook. We'd never withdraw money just to flush it because there were no worthwhile spending opportunities. The "rational man" says that if the portfolio is staggering under the load of high inflation and diminishing equity values AND spending opportunies (for the things in our plans such as travel) are poor, we're not going to take the money out and toss it to the winds.

But, at this stage - six months into ER, we're doing our planned WR and just enjoying the hell out of life! It is great!
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Re: Return more than planned
Old 12-08-2006, 08:44 AM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,457
Re: Return more than planned

Quote:
Originally Posted by lazyday
There is an issue with starting fresh each year, as if retiring on the current portfolio. Like the first post said, excess return is needed for the bad years.

If Trinity/Firecalc/your spreadsheet says that 4% would have worked 95% of the time for you, but then every year you start over, then you keep trying to find the 5% failure rate.
No this isn't true. If you "start fresh" each year, then you do the same thing when your portfolio shrinks. You can take 4% every year and never run out. While your portfolio is shrinking, you'll be taking out less and less.

Audrey
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Re: Return more than planned
Old 12-08-2006, 09:48 AM   #34
Thinks s/he gets paid by the post
ladelfina's Avatar
 
Join Date: Oct 2005
Posts: 2,713
Re: Return more than planned

right, Audrey..!

and lazyday, I get what you are saying, too, but I'm not at 95%, I'm just right around 100%, so in theory spending the excess isn't, for me, "trying to find the failure rate". What I'd be risking spending the excess right now (as you point out correctly) is what would happen if the future holds a period worse than any other in history, which is certainly possible. In which case I'd be trying to find a failure rate not yet conceived by Firecalc.


But that goes for everyone else, too. The "safe" withdrawal rate is either safe, or... it isn't.. depending on what you think the future holds, I guess. It certainly doesn't look all that rosy, but I'm sure people felt worse during the Depression and during the inflationary '70s. The underlying assumption (return of 7% minus inflation of 3% = WR of 4%) is from within the universe of the past so there's still a chance that that will not continue to hold true.

Is there a way to come up with a "SSWR" (a super-safe withdrawal rate)? :
Maybe that has already been addressed.. I will poke around and see.
__________________
ladelfina is offline   Reply With Quote
Re: Return more than planned
Old 12-08-2006, 10:14 AM   #35
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,638
Re: Return more than planned

Quote:
Originally Posted by audreyh1
No this isn't true. If you "start fresh" each year, then you do the same thing when your portfolio shrinks. You can take 4% every year and never run out. While your portfolio is shrinking, you'll be taking out less and less.

Audrey
That is not what I was getting at. My "start fresh each year" scenario does not involve cutting back from the initial 4% + inflation start -- ever. You start out at 4% SWR (with inflation increases) at a time in life when your portfolio is such that you estimate that you have enough for a "good" retirement. Just like in a standard SWR scenario, you assume you will never drop below the calculated rate. AFTER the 1st year you evaluate the situation. Only if the return is enough to fund the 3% increase in the portfolio and the the 4% spend and still have returns left over (a la Ladelfina's $100K this year) do you consider putting the excess in a "mad money" pot and starting afresh as a new ERer in year 2. The following year starts with no preconceptions. You are just a regular ERer starting out with your slightly larger portfolio at your slightly larger 4%. Firecalc will always give you the same or better survival rate in this scenario (better, because as the happy years go by you have a shorter life span to fund). In a bad year, you still pull out your inflation adjusted 4%. If the year after that is good, YOU DO NOT pull out extra earnings because you need to build your portfolio back to where it should be. If the market stays bad you get to test SWR theory. If the market turns very good again, you may get to a point where you can reevaluate and start fresh again.

I am simply pointing out that if your portfolio is doing great, you can always apply the FIRE principle of "what would the people on the Board recommend as an SWR to someone else retiring this year with this portfolio?" If it is good for everyone else, it has to be good for you. I am also not proposing that people aggressively pursue this strategy. You would certainly want to be cautious in evaluating the strength of your portfolio after a huge run-up year like 1999. But I assume the Board would caution a new retiree to be careful about the SWR in that scenario as well.

All this is to say that, if I was Ladelfina, I would consider a few house projects but I wouldn't spend the entire $100K -- I might put half in another account labeled "vacations." Then I would start my new ER over again with my regular portfolio and a 1 year shorter life expectancy in FIRECALC
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Re: Return more than planned
Old 12-08-2006, 10:27 AM   #36
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,638
Re: Return more than planned

Ladelfini - despite my spendthrift proposals you might consider taking a less aggressive approach. How about spending $25K on some "to die for" projects. Return the other $75K to your portfolio and calculate a new ER starting with a 3.9% SWR (or whatever rate matches your pre-planned adjusted withdrawal for next year). A few years of that and you will get the SWR success level up to five 9s.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Re: Return more than planned
Old 12-08-2006, 10:50 AM   #37
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
Re: Return more than planned

Quote:
Originally Posted by donheff
The reason I mentioned the intestinal fortitude is that, if you spend the extra money and restart very year, the chances are good that you are eventually going to be "starting" retirement in a bad year. Thus you get to test SWR theory with a bad start. Of course, if you save up a pool of "mad money" you should be able to flatten out the downside.
There is a first time for everything. I disagree with you on this

It does not matter at all if you eventually hit that bad year. The success rate given by any calculator is based on the worst possible year(s). As long as your method is followed you always start with the same constant amount of money. So whatever risk you took last year remains constant as well. No additional risk is introduced by resetting.
__________________
Sam is offline   Reply With Quote
Re: Return more than planned
Old 12-08-2006, 11:04 AM   #38
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Re: Return more than planned

Quote:
Originally Posted by Sam
There is a first time for everything. I disagree with you on this

The success rate given by any calculator is based on the worst possible year(s).
I have a different view on that Sam, for the original FIRECALC anyway. The success rate there is defined by the worst performing historical time period, definitely not the worst possible time period. We haven't seen the worst possible time period yet.

I always remind myself that until RE types suffered through the drop of equity values and high inflation of the late 60's and 70's, they thought the Great Depression years were the worst possible years! Of course, they were wrong!

Could we have a period worst than the late 60's and 70's in the near future? You bet we can! My own amateur projection is that we will see more variability in the upcoming decades with higher highs and lower lows and we're going to have an interesting time managing through it.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Re: Return more than planned
Old 12-08-2006, 11:09 AM   #39
Thinks s/he gets paid by the post
 
Join Date: Mar 2006
Location: Houston
Posts: 2,155
Re: Return more than planned

Quote:
Originally Posted by youbet
definitely not the worst possible time period. We haven't seen the worst possible time period yet.
I am fully aware of that. That's why I bold faced the word additional. Glad you brought it up though. I have the feeling that certain members think it's foolproof when their SWR achieves 100% success rate. Nothing is 100% in life.
__________________
Sam is offline   Reply With Quote
Re: Return more than planned
Old 12-08-2006, 11:16 AM   #40
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,457
Re: Return more than planned

Well, for me the inflation adjustment is just too complicated, so I decided to blow that off. I'm truly comfortable with a varying annual income, so I don't try to emulate a fixed+inflation annual salary.

Just a straight % annual withdrawal works for me. It's easier!

And just because I withdraw the money doesn't mean I have to spend it that year. I still tend to LBYM even today, so I let excess funds accumulate for that rainy day or that special project or that bad year, or whatever.

Audrey
__________________

__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   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
Can I cotribute to my Roth after I file tax Return blazerjeremy Young Dreamers 16 02-07-2006 05:34 AM
Tracking Internal Rate of Return with Quicken or MS Money Dude FIRE and Money 2 01-18-2006 08:37 PM
Yield and YTD return smooch FIRE and Money 3 12-13-2005 07:10 AM
YTD return smooch FIRE and Money 24 12-08-2005 11:17 AM
Market Return Jane FIRE and Money 46 12-01-2004 05:42 AM

 

 
All times are GMT -6. The time now is 09:35 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.