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What is your withdrawal rate?
Old 06-11-2019, 06:56 AM   #1
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What is your withdrawal rate?

I am asking to learn what others find practical. We are planning on using a VPW method. Few seem to withdraw so high a percent, makes me a little nervous. I would like to keep track what others do, have started a public spreadsheet: https://docs.google.com/spreadsheets...it?usp=sharing

I would like to know what you do and why you choose that route.
If you are willing, please share:
When you retired.
Age at retirement.
Asset mix or portfolio style
What growth you have seen in portfolio since retirement
How much you retired with/saved (how many x of expenses)
pension now or later?
SS at what age?

Feel free to message me you info if you do not want to publicly post, I will not put your name on the list.

Thank you
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Old 06-11-2019, 07:02 AM   #2
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I withdraw at the end of the month what I need to pay all the bills in the ensuing month.
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Old 06-11-2019, 07:08 AM   #3
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Thanks for that Jembke, I assume you are unwilling to share more than that?
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Old 06-11-2019, 07:13 AM   #4
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4nurse, I'm doubtful many (any?) here will be willing to disclose what you are asking, even via PM. Here's my input: FIRECalc vs REW
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Old 06-11-2019, 07:18 AM   #5
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Mine has averaged just under 3.5% in the 5 years since I retired at age 61. There's a big "lump" in 2015 when my late husband and I downsized (fixes to the old place, moving expenses, making changes to the new place including unanticipated replacement of the 20-year old HVAC system), but that's the average. The number I monitor most closely is the change in the value of my investments over that time and right now it's 2.5% annually AFTER withdrawals and that tells me it's sustainable. I'm collecting SS on DH's record but will get a bump of about $1,500/month when I file for my own at age 70.
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Old 06-11-2019, 07:18 AM   #6
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Quote:
Originally Posted by REWahoo View Post
4nurse, I'm doubtful many (any?) here will be willing to disclose what you are asking, even via PM. Here's my input: FIRECalc vs REW
Are you still 65/35?
Can you clarify the percent of original portfolio remaining? It looks slightly higher.
It looks like a few will share and such things can help those that dont share.
Can you update since 2015?
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Old 06-11-2019, 07:23 AM   #7
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Some of the info you requested:

Fired 5 years ago at 53
70/30* AA (index funds - tilts to value, scv and em)
@ 66 or so pensions and SS will cover our budget
WRs have ranged between 2.8-4.4% no inflation adj
Investable assets up about 20% (peak) compared to Fire date
SS date - not sure, still deciding, probably FRA or later

ETA:*Our AA is higher than some. I have two reasons for this. First, our retirement is likely overfunded. And, I prefer to leave the funds invested. Second, we do not have a mortgage. If we had a mortgage, I would probably back the stock allocation down.
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Old 06-11-2019, 07:34 AM   #8
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I use VPW too. I didn't feel comfortable with their numbers either, so I came up with my own. I started at 3.0% at age 53 (a few years into retirement), and I increase by .05% a year until 3.8%, then by 0.1% to 4.9%, and increases come a little more quickly after that. I take mine beyond 100 too. I'm under-budget and not depriving myself, plus the market has done well so my base keeps increasing, so I'd rather have a plan for an outlier case than spend money foolishly just because I can.

The numbers you ask for aren't that personal so I suppose there's no issue there, I just don't feel like figuring them all out.
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Old 06-11-2019, 07:37 AM   #9
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Originally Posted by jebmke View Post
I withdraw at the end of the month what I need to pay all the bills in the ensuing month.

I retired in December, 2007 at age 55. Allocation was approx 40/60 at the time and is still there. Re-balanced regularly until my tax losses ran out a year or so ago. Now, I plan to let it ride unless the market goes down - will keep a floor of 40% on the downside and let equity run on the upside.
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Old 06-11-2019, 07:38 AM   #10
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Quote:
Originally Posted by 4nursebee View Post
Are you still 65/35? I have been 42/58 since 2010
Can you clarify the percent of original portfolio remaining? It looks slightly higher. Ignoring inflation, up about 15% from where we started.
It looks like a few will share and such things can help those that dont share.
Can you update since 2015? See post #129 in the thread.

I plan on updating again next June - after 15 years of retirement.
...
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Old 06-11-2019, 08:05 AM   #11
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Quote:
Originally Posted by 4nursebee View Post
If you are willing, please share:
When you retired.
Age at retirement.
Asset mix or portfolio style
What growth you have seen in portfolio since retirement
How much you retired with/saved (how many x of expenses)
pension now or later?
SS at what age?
I'm not retired yet, but plan to retire at age 60, wife will be 55. My portfolio is just under 60/40 and I plan to keep that allocation at least for the first several years. My portfolio growth seems to vary depending on the current market, but is generally above the 6% I plan for.

We should have about $250K when we retire. The majority of our income will come from my wife's pension. We both plan to take our SS at age 62, at which point SS and pension will cover all of our expenses.

I am not planning for any specific withdrawal rate. We will simply withdraw however much we need to pay expenses each year. We should average a withdrawal rate around 5-10% for the first few years, then that will drop to zero once we are on SS. Our portfolio only has to get us through the first 10 years or so, after that it's just an emergency fund and fun money.
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Old 06-11-2019, 08:08 AM   #12
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Retired 7 years ago. Mostly use our SS and small pensions for our expenses. Then we withdraw what ever amount we need or want for large purchases, vacations, and gifts to our grown children from a MM account into which dividends have been swept. No plan. So far our investments have grown quite a bit since retirement. If this fails to continue it would mean the stock market has crashed the worst in history and the country would be in a deep dark depression heading toward being a 3rd world country. But life is good. If it wasn't for health concerns life would be fantastic.


Cheers!
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Old 06-11-2019, 08:10 AM   #13
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My current withdrawal rate is in the 1.5-2% range. I am 45 and have been living solely off my portfolio for 4 years.

VPW says that my WR could as high as 3.9% (with a 50/50 AA) while FIREcalc gives me the green light up to 3.4% (constant spending).

Single, no kids, very low fixed expenses... I plan to wait until 70 to claim SS. No pension.
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Current WR: < 2%
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Old 06-11-2019, 09:01 AM   #14
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Retired in Aug 2017.
57 years old when retired.
AA = 55/47/8 in index funds/CD/MM
WR% 2017=3.70% 2018=2.43% 2019=3.0%
Portfolio has only gained 1.5% after withdrawals partially due to 2018 returns and partly due to chasing additional NASDAQ/Small Cap increases after the high was reached, plus having an International allocation
No Pensions
Plan to take SS at 70 y.o. DGF is already on SSDI.
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Old 06-11-2019, 09:03 AM   #15
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It's in my signature line. My expenses started out low for the first 3 to 4 years and then nearly doubled when I moved my son to a different school district for high school.

I withdraw a fixed amount each month which is currently an annualized WR of 5.6%. This will drop substantially in four years when (A) he graduates HS and (B) I might start SS.

Regardless, my portfolio is currently 9% larger than it was when I first ER'd and my personal portfolio performance has been 8% since inception according to Vanguard.
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Old 06-11-2019, 09:05 AM   #16
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Perhaps this is a good place to ask for a clarification of how the VPW works.

I've seen the Bogleheads wiki which has a withdrawal rate table.

I'm 64 with a 40/60 allocation and the table gives me a 4.5% WR.

That seems kind of high to me.

I understand that the VPW rate is recalculated each year based on my savings balance and may entail the purchase of an annuity around age 80 to cover expenses. Is that correct?

My actual WR is lower than the Bogleheads table because of pension income and SS.
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Old 06-11-2019, 09:20 AM   #17
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This is our first full year of retirement, and we withdrew 2.9%.
We retired last year at 61 and 65.
How much you retired with/saved (how many x of expenses) -- 30x
Our AA is 50/40/10
We'll probably keep our annual withdrawal at ~3.5% and pull out extra for big things like a roof or car or big trips, as needed. I have a small pension, and started SS at 62 and DH is taking my restricted spousal benefit until he turns 70 and this covers 90% of our basic,regular expenses and any IRA withdrawals just improve our standard of living and fun.

If anyone wants info on VPW, here's the Boglheads link: https://www.bogleheads.org/wiki/Vari...age_withdrawal
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Old 06-11-2019, 09:52 AM   #18
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I retired four years ago at age 61. No pension and I currently received survivor's SS benefits. I'll switch to my own when I turn 70, at which time the amount will double.
So far I have not had to withdraw from any of my investments. My income has exceeded my expenses. I am hoping not to withdraw from investments (which are 60/40) until I am forced into RMDs. My portfolio is up quite a bit since I retired but I set aside a healthy cash reserve just in case.....
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Old 06-11-2019, 10:18 AM   #19
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Quote:
Originally Posted by 4nursebee View Post
I am asking to learn what others find practical. We are planning on using a VPW method. Few seem to withdraw so high a percent, makes me a little nervous. I would like to keep track what others do, have started a public spreadsheet: https://docs.google.com/spreadsheets...it?usp=sharing

I would like to know what you do and why you choose that route.
If you are willing, please share:
When you retired.
Age at retirement.
Asset mix or portfolio style
What growth you have seen in portfolio since retirement
How much you retired with/saved (how many x of expenses)
pension now or later?
SS at what age?

Feel free to message me you info if you do not want to publicly post, I will not put your name on the list.

Thank you
Retired in 2015, we're both 50 something. AA: was mainly in stock funds when w*rking, now 50-60% equities (everything low cost broad market index funds). No accounting for inflation we're 5-10% from where we started. Our WR rate has ranged from 4% to mid 4-ish % (based on original amount plus inflation). Expect WR to drop below 4%, say mid 3% when we pull SS. Originally planned to pull SS at 62, but with up market maybe 64.

We're favoring the near future with a relatively high WR and early SS in order to enjoy life while we're younger and have the health and energy. The above 4% WR w*rks (90%+ success) in simulators like Firecalc because our long term planned WR drops to around 3.5% with SS and we add a longevity correction to the Firecalc success projections (we still succeed if we die before going broke). Have recently though about VPW, although it results in more or less my current WR plan. So, same answer with methods.

I strongly recommend that the OP model his own specific spending over time, although it is certainly a guess-timate at best, and run in a couple of retirement simulators. This simulators allow for changes in WR based on SS coming online and expected changes in expenses and income. This is far more realistic than simplistic rules of thumb or guidelines like the 4% or whatever "rule".


Note that this is a conservative bunch here. Lots of folks with WR's well below 4%, even below 3%. Lots of pensions too, and average retirement age into the 50's. For a more aggressive perspective, check out MMM's forum where there are more 30 and 40 somethings and 4%-ters (but beware of all their caveats like side-hustles and willingness to decrease living standard or go back to w*rk).
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Old 06-11-2019, 12:21 PM   #20
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Quote:
Originally Posted by 4nursebee View Post
I am asking to learn what others find practical. We are planning on using a VPW method. Few seem to withdraw so high a percent, makes me a little nervous. I would like to keep track what others do, have started a public spreadsheet: https://docs.google.com/spreadsheets...it?usp=sharing

I would like to know what you do and why you choose that route.
If you are willing, please share:
When you retired.
Age at retirement.
Asset mix or portfolio style
What growth you have seen in portfolio since retirement
How much you retired with/saved (how many x of expenses)
pension now or later?
SS at what age?

Feel free to message me you info if you do not want to publicly post, I will not put your name on the list.

Thank you
Too lazy to add to your spreadsheet but not lazy enough to not answer here.

Retired three years ago (Feb 19, 2016)
Age was ~46.75
Asset mix has varied between 100/0 and 90/10. Currently is 93/7 with lazy intention to move towards 96/4.
Portfolio style is VTSAX/VBTLX. LTBH very low cost indexer.
My retirement portfolio is 63.5% higher today than it was the day I retired. (It would have only been 57.6% higher if I had not received a small inheritance from my Mom.)
27.35x expenses.
No pension.
SS at age 70.

Although you didn't ask, I'm currently at a gross WR of 2.8% (expenses/FIRE stash). I also have what I call non-portfolio income, which is income from sources besides my portfolio (gifts, tax refunds, side gig income) and amounts to 1.37% of my FIRE stash. So I have a net WR of 1.43%.

For lots of reasons, I spend little. Among them are being a relatively new retiree, having three kids in or near college age, and having a mother of Scottish extraction. Intellectually I think I would be fine with a net WR of 4%.

ETA: My gross WR has varied between 2.5% and 3.5% and my net WR has varied between about 1% and 2% over the past three years. This is partly because I measure it based on my last six months of expenses, which can be lumpy due to Christmas, property taxes, and vacations.
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