Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Re: Varying Withdrawal rates
Old 02-21-2004, 09:25 AM   #21
Dryer sheet aficionado
Join Date: Jul 2002
Posts: 26
Re: Varying Withdrawal rates

I played around with the variable rates idea a good bit, and even contributed a few spreadsheets on the idea over at TMF, but was never happy with trying to model the withdrawal strategy. *Too many differences in everyone's ideas of when to take out extra.

I decided personally to take a different approach. Mentally I divide my portfolio into 3 buckets.

Bucket one is what I feel I need to maintain my lifestyle until social security kicks in. I withdraw at the nearly 100% safe rate from this now, nut the time frame is only until SS kicks in.

Bucket two is the part I'll need to add to SS to maintain that lifestyle. No withdrawals now; nearly 100% safe rate starting when I start withdrawals, with a time frame to outlast me.

Bucket three is "play" money, and I feel comfortable withdrawing at a more risky rate, like 85%.

Taking this approach, rather than trying to make a single decision on what I needed, has helped me a lot -- and speeded up my early retirement by about 2 years.

I take a similiar approach to figuring out how much money I can spend during early retirement. I created an Excel spreadsheet that lets me divide up the money into the various buckets. Here's a tip that I would like to share--let's say you have a certain portfolio size and you want to know how what is the total withdrawal amount that maximizes your withdrawal from each bucket. To get that number, I use the "goal seek" function found under the "Tool" menu. You might find this helpful if you want to adjust your withdrawal amount say for a a POPR.

<br />
patnbj 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 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!


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
Increasing withdrawal rates aenlighten FIRE and Money 4 05-07-2007 03:03 PM
Safe withdrawal rates....up to 6.2% tkp FIRE and Money 15 03-07-2007 06:27 PM
Withdrawal Rates in Paul Merrimans Book Hydroman FIRE and Money 17 05-10-2006 04:14 PM
Withdrawal rates - theory vs practice Roger_R FIRE and Money 56 01-17-2005 06:45 AM
What about this for higher withdrawal rates? Roger_R FIRE and Money 11 11-21-2004 12:29 PM


All times are GMT -6. The time now is 04:28 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.