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View Poll Results: What's the highest SWR you're comfortable with?
2% or lower 7 4.32%
2.5% 7 4.32%
3% 31 19.14%
3.5% 34 20.99%
4% 51 31.48%
4.5% 16 9.88%
5% or higher 16 9.88%
Voters: 162. You may not vote on this poll

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Old 02-10-2010, 03:01 PM   #61
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I also have a pension and SS Survivor benefit without those two things doing the straight 4% would have meant a huge drop in my budget after the stocks plummeted . As it was with the two other areas remaining unaffected the drop was not that severe .
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Old 02-10-2010, 03:46 PM   #62
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Well, I voted 3.5 but that was only because I assumed the term was referring to the old "start with a specific amount and adjust for inflation" concept. But like quite a few others here I actually am taking a percentage of the total portfolio (currently 4%) - whatever that total is at the end of each year. In good years I hope to generate a "slush fund" outside the regular portfolio that I could tap during a real bad stretch. I will re-evaluate as the years go by.
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Old 02-10-2010, 03:55 PM   #63
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I voted with the crowd @ 4% SWR.

I plan on actually taking out the RMD amount from my IRA, but I doubt that I will need to spend all of it so part of it will probably go back into the TSM taxable account @ VG.

Sounds like a plan...
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Old 02-10-2010, 04:17 PM   #64
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Don't know if it belongs here or in one of the health care threads:
American retirees worry more about money than Canadians: survey
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Old 02-10-2010, 06:09 PM   #65
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I saw a post somewhere in this thread about the "3 legged stool" but can't find it again. I recall reading about this approach about 1 year before I FIREd. It made perfect sense.
My three legs include pensions (CSRS survivor now + my own tiny FERS in 5 years), a fixed annuity (formerly TSP), and a portfolio which I am still building using half my annuity income.
What "3-legged stool"? Look at my signature line.

I am balancing, hopping mad on a pogo stick (my own savings). When that spring gives out, I am .
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Old 02-10-2010, 06:45 PM   #66
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What "3-legged stool"? Look at my signature line.

I am balancing, hopping mad on a pogo stick (my own savings). When that spring gives out, I am .
I'm also taking the pogo stick approach to retirement planning. It is....challenging.
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Old 02-10-2010, 06:51 PM   #67
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I have always thought diversification of income streams (as well as diversification in investments) was something to strive for in my planning.

I think I actually have a four legged stool, or will soon. As soon as I am eligible for SS, I will have the three legged stool that federal employees are always told about: pension, TSP, and social security. But my stool also has the extra "leg" of taxable investments so that makes 4 legs. I would love to have another "leg" but I think this will work out all right.
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Old 02-10-2010, 07:20 PM   #68
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I have always thought diversification of income streams (as well as diversification in investments) was something to strive for in my planning.

I think I actually have a four legged stool, or will soon. As soon as I am eligible for SS, I will have the three legged stool that federal employees are always told about: pension, TSP, and social security. But my stool also has the extra "leg" of taxable investments so that makes 4 legs. I would love to have another "leg" but I think this will work out all right.
I guess I have a 7 leg stool, or is that a table and a stool?

3 private pensions, SS for myself and also DW has her own SS plus I have the UK equivalent of SS at age 67 and I have all our investments.
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Old 02-10-2010, 07:33 PM   #69
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Now THAT's diversification of income streams! Good work!
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Old 02-11-2010, 10:36 PM   #70
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Many of you already described your SWR strategy in your comments here (and thank you for that), but wanted you to know I've posted another poll as a sequel to this one: What's your SWR strategy?
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Old 09-18-2010, 05:19 AM   #71
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Ditto.

I have designed my own Excel file to calculate my SWR but I am not an finance expert. Does anyone know reliable, well designed Excel models please ? Thank you for letting me know.

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I did not know the term SWR until I came to this forum
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Old 09-18-2010, 07:13 AM   #72
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I have designed my own Excel file to calculate my SWR but I am not an finance expert. Does anyone know reliable, well designed Excel models please ? Thank you for letting me know.
I think the best Excel file to calculate your SWR is FIRECalc...
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Old 09-18-2010, 07:28 AM   #73
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Not sure if it still exists, but when I ERed, the Fidelity website had a free program that generated a year by year spread sheet of withdrawals, taxes, SS, etc. based on your input assumptions.
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Old 09-18-2010, 07:41 AM   #74
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"What's the highest SWR you're comfortable with?"

The one that gets us to our goal and allows us to live our life in retirement as we planned. Its as simple as that ...

It's not one constant goal. It can't be, due to my retirement at age 59 without income (other than my SPIA and VA disability) until I hit SS, at age 70 (that's another thread/discussion ). Whle my DW was to retire at the same time, she's not emotionally ready, and three years later she remains employed (she talks about retirement mid-2011; I've head that story before )

Anyway, using FIDO's RIP (Retirement Income Program) which shows rate of portfolio withdrawl year by year, and assuming my wife is currently retired (I don't factor in her current income, since she could retire any day) it currently shows the following age/rate of withdrawal:

63 - 7.51%
64 - 9.12%
65 - 10.62%
66 - 6.2% (falls due to my DW's SS and my claim against her)
67 - 6.62%
68 - 7.28%
69 - 7.9%
70 - 2.28% (when my SS kicks in)

From the time we turn 70 (we're the same age) through age 89, we are forecast not to exceed 4% withdrawals. Actually, it would be much less than the 2-3% but that rate is required to withdraw excess RMD's (e.g. funds not need for living expenses, but required to be withdrawn due to law)

Our plan goes to age 100 (even though we won't make it; we're also planning for the future of our disabled son). At age 90, it goes to 4.1% and at age 100, it's 5.67%, which is well within the limit of an old person's withdrawls.

Like anybody that retires before "normal" (whatever that is - I'll assume before you decide to draw SS), your rate of withdrawal may be higher than 4% to support your lifestyle until all "income sources" become available.

Sure, we could tighten our respective belts and strive for that "magic 4%", but why? If we would, our post-70 income would quite possibly push us into negative withdrawals. That doesn’t make much sense, either.

Anyway, that's our POV.

EDIT: Sorry, I see this is an old thread and I already responded. However the stats I've provided for our situation are up to date a/o today, so I'll just let the post stand (if a mod want's to delete my earllier entry, feel free.)

BTW, FIDO does still have the RIP program. They also have a "MyPlan" option that is not as robust nor generates the 25+ pages that the full RIP product does. Also be aware that RIP gives you a better picture if you detail your expenses and changes throughout retirement, rather than just plug in a standard expense total.
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Old 09-18-2010, 10:58 AM   #75
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Ditto.

I have designed my own Excel file to calculate my SWR but I am not an finance expert. Does anyone know reliable, well designed Excel models please ? Thank you for letting me know.
Check out otar retirement calculator.
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Old 09-19-2010, 08:43 PM   #76
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Well, I voted 4%, but...it's complicated.

I'm still in the planning stage. I'm using 4% to determine "my number" as a baseline...to determine at what point I'd be comfortable in retiring.

Having said that, I also look at a PV of SoSec and look at the combined picture.

So, for example, if we start with a base of $1MM, 4% would give $40,000. Then, SoSec may throw off another $15k when the appropriate age is reached. So I *may* decide to do 5.5% in the time from ER to SoSec, then drop it down to 4%. There's certainly some risk in that, but see below.

Needless to say, I'm still figuring this stuff out and what will work for me, both in terms of income and getting a good night's sleep.

There are some other factors involved, one of which is my house. I plan to move to a much lower cost of living location and hence expect to spit off some decent funds when I sell my current place. For a long time, I've been leaving that off the table as a big, fat cushion (this would provide some insurance in case the 5.5% rate mentioned above in the years bridging to SoSec were down years). I may decide to bring it in the fold, but then be more conservative.

Having said all that, one of the things with the 4% solution is that, over 30 years, there is a good probability of leaving, perhaps substantial, money on the table, and I have no strong desire to leave much behind.

So...I think the path I'm heading down is one where I'll be able to live comfortably in retirement using the 4% guideline, but if things work out as they very well could, I'll have some spare money to supplement my travels.
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