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SWR for someone early retired, 30 to 40 yrs old
Old 11-24-2013, 05:29 PM   #1
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SWR for someone early retired, 30 to 40 yrs old

There was an old thread on this (now locked due to age) but I'm wondering what current thinking is?

Let's assume one has a substantial nest egg and wants to partially or fully retire at age 30 (or 40). Also assume he or she is very conservative and wants to only live off 'income' from his assets (& reinvest enough to at least cover any inflation, so therefore the nest egg is actually staying stable or even growing slowly over time).

Final assumption assume the portfolio is mostly taxable accounts and is a 60/40 stock/bond split.

What would a SWR be?

The 4% rule is out the window obviously. I am thinking the right number might be 1% to 1.5%?
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Old 11-24-2013, 05:40 PM   #2
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I don't know how you'll figure it out at 40? I'm having a tough time figuring it out at 50.

I think the reality is for those of us looking at 40 to 60 years of retirement income we have to start out as conservative as possible. Guessing what inflation will be and expected market returns for that length of time is impossible.
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Old 11-24-2013, 05:40 PM   #3
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You can still see the poll results and the member posts on the thread you linked to. I'm not sure replies would be much changed since then, but this new thread may prove otherwise. There is no universal answer, depends on what probability of success makes you comfortable, expected longevity and a host of other unknowns. What's the basis for your 1.0-1.5% hypothesis?
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Old 11-24-2013, 05:41 PM   #4
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Quote:
Originally Posted by uzigsd View Post
There was an old thread on this (now locked due to age) but I'm wondering what current thinking is? Let's assume one has a substantial nest egg and wants to partially or fully retire at age 30 (or 40). Also assume he or she is very conservative and wants to only live off 'income' from his assets (& reinvest enough to at least cover any inflation, so therefore the nest egg is actually staying stable or even growing slowly over time). Final assumption assume the portfolio is mostly taxable accounts and is a 60/40 stock/bond split. What would a SWR be? The 4% rule is out the window obviously. I am thinking the right number might be 1% to 1.5%?
FYI, The thread you reference is not locked; before posting to it, you are just asked to check a box to acknowledge that you understand how long it has been since the last post was made to it.
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Old 11-24-2013, 08:30 PM   #5
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I'd be happy with 4% with quite a bit of flexibility. 3% with a little flexibility. But at those levels there is just not a lot of supporting data. A 50 year retirement estimate using only 100 years of data. And with either, if your portfolio survives the first few years well enough to reach 2% to 3% of portfolio WR, you're in good shape. Just takes a little longer at 4% WR.
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Old 11-24-2013, 11:35 PM   #6
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...A 50 year retirement estimate using only 100 years of data...
Gives one food for thought... 50 years is a long time.

In 50 years, my children will be quite older than I am now. Yet, it is less than the time since my earliest childhood memory. And I am not as old as some geezers around here. Too bad I will not be around to see what happens in 50 years. I am thinking I may have 20 years left, if that.
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