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SWR for someone early retired, 30 to 40 yrs old
11-24-2013, 04:29 PM
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#1
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Confused about dryer sheets
Join Date: Nov 2013
Posts: 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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11-24-2013, 04:40 PM
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#2
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Recycles dryer sheets
Join Date: Aug 2013
Posts: 349
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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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11-24-2013, 04:40 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,304
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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?
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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11-24-2013, 04:41 PM
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#4
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Moderator Emeritus
Join Date: Sep 2007
Posts: 17,774
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Quote:
Originally Posted by uzigsd
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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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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“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
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11-24-2013, 07:30 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 4,366
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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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11-24-2013, 10:35 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 2008
Posts: 35,712
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Quote:
Originally Posted by Animorph
...A 50 year retirement estimate using only 100 years of data...
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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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"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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