Withdrawal rates for 2017, and planned for 2018

[Meadbh]

Quote:

Originally Posted by Alan 2017 25.3% Bought a house and a new car with no trade in. It is what it is

Wow, that was brave. IIRC, you had sold your US home several years ago and were renting. So I suppose you could rationalize that your investment portfolio was “inflated” by the proceeds of that home for a number of years. Having several pensions also helps.

[Tallman4123]

Quote:

Originally Posted by audreyh1 For some people that might be true - if they are withdrawing from all their assets. But Chuckanut and I withdraw from a subset of our assets labeled “retirement assets” and invested for the long term and thus subject to market volatility. As long as we don’t reinvest that excess in the retirement assets, our withdrawal rate holds regardless of how much we spend in the current year. Many folks like to use all their investments (except perhaps for checking, some savings, 529s, HSAs, current year or quarter money, set asides for certain major purchases, etc., etc.) to calculate their withdrawal rate. I don’t. I only withdraw from and rebalance the retirement assets. Other assets outside the retirement fund are treated independently. Clearly in our case withdrawal rate and annual spending rate are not synonymous, although withdrawn funds could be spent at any time in the future, just not necessarily in the same year as withdrawn. I’m not interested in rebalancing across all my assets - just the retirement assets. Many people do prefer to treat it all as one big pot. I prefer to distinguish between retirement assets which are invested in long-term investments and non-retirement assets which cover a variety of shorter term goals and are generally invested in short-term instruments and can be spent at anytime without impacting the retirement assets or withdrawal rate.

Got it. Thanks!

[Moemg]

I do pretty similar to Audrey .I set the amount I can spend at 4% but many years I spent less . The excess goes to a slush fund which I could have used to pay for my car with but I chose to just make my amount spent at 6% and keep the slush fund for future use.

[Alan]

Quote:

Originally Posted by Meadbh Wow, that was brave. IIRC, you had sold your US home several years ago and were renting. So I suppose you could rationalize that your investment portfolio was “inflated” by the proceeds of that home for a number of years. Having several pensions also helps.

That’s right, we sold our house in 2004 and just put those funds into our portfolio. It had nothing to do with costs but with having the flexibility to lock and leave. Now that we have curtailed vacations lasting many months and we wanted to live in a particular small market town in N Yorkshire owning became the obvious thing to do.

With no rent, low property taxes, reduced travel and much lower healthcare costs our reduced expenses have not affected our SWR. Our net worth hasn’t changed much just our investable assets.

Life is good.

[Chuckanut]

Quote:

Originally Posted by Moemg I do pretty similar to Audrey .I set the amount I can spend at 4% but many years I spent less . The excess goes to a slush fund which I could have used to pay for my car with but I chose to just make my amount spent at 6% and keep the slush fund for future use.

In my case, As I long as the Bear does not take a big chunk out of this market it’s a slush fund. If/When the Bear shows up, it becomes a survival fund.

[Beldar]

2.1% 2016

1.7% 2017

Essentially the same dollar amount each year, however the portfolio has grown substantially therefore the lower percentage.

I could easily double the WR but no Medicare yet so we have to play the ACA subsidy game. Plenty of after tax vehicles to fill in any holes along the way.

Thank you ER forum for showing me the way! Happy New Year.


_B

[Danmar]

Retired 11 years. Up until 2017, generally just spent divs. Current yield would average in the range of 3.25-3.75%. In 2017 I finally broke down and liquidated some stock. Around 2%. Plan to do the same in 2018 if market cooperates. Large gift to daughter and other big somewhat unusual expenses. Portfolio has returned double digits CAGR for 11 years. Sequence of return risk fading for me I think.

Given the very strong market results for the last 8 years or so, I am a little surprised how low many of the WR’s people quote here. In many (most?) cases your heirs will thank you. Maybe just a cautious bunch? Concerned about health care maybe? Or really don’t have anything else they want? Or early in retirement? Or portfolio is relatively small in relation to other sources of retirement income? Could be lots of reasons I think. But, at least in this thread, nobody’s taking Robbie’s advice?

[mpeirce]

I use a variable withdrawal of 4.5% of the average of the last three years financial assets (this excludes our home's value).

This year the averaging means we're withdrawing 3.9% of our financial assets as of last Friday.

Last year it worked out to 4.4%, but looking at actual spending we only really spent 4.1%

Even though the percentage this year is lower, the actual dollar amount is up over 7% - 13% more than what we actually spent. We'll see if we spend it all...

[NW-Bound]

Quote:

Originally Posted by Danmar ...Given the very strong market results for the last 8 years or so, I am a little surprised how low many of the WR’s people quote here...

There may be high-WR people, but they are out busy spending and do not post. The ones staying home counting their beans are the one who post?

[Meadbh]

Quote:

Originally Posted by danmar Given the very strong market results for the last 8 years or so, i am a little surprised how low many of the wr’s people quote here. In many (most?) cases your heirs will thank you. Maybe just a cautious bunch? Concerned about health care maybe? Or really don’t have anything else they want? Or early in retirement? Or portfolio is relatively small in relation to other sources of retirement income? Could be lots of reasons i think. But, at least in this thread, nobody’s taking robbie’s advice?

No pension!

[Moemg]

Quote:

Originally Posted by Chuckanut In my case, As I long as the Bear does not take a big chunk out of this market it’s a slush fund. If/When the Bear shows up, it becomes a survival fund.

Absolutely !

[Danmar]

Quote:

Originally Posted by Meadbh No pension!

Well I think you do have Canada Pension Plan? That is a pension. I can see that having a relatively small pension like CPP might make one a little more conservative. But eventually, if these results continue?? Could always annuitize some of your gains?

[NW-Bound]

Seriously, even without pension I can spend a lot more when I consider future SS. But I do not crave anything.

The one thing I care to have and covet for a long time is a waterfront home on Bainbridge Island across Seattle, but that is way out of reach for me. Despite our love for travel, we cannot be perpetually in motion, and value our time at home too. Not caring about cars or anything else, there's no reason to get stuff that I do not care about.

Just the other day, my wife was told about someone getting robbed of a smartphone in broad daylight in a shopping mall. Don't know what phone it was, but good grief! I don't want a latest smartphone that bad, and that turns me off more.

They have these curved gigantic TVs for not that much money, but my existing 50" has not been turned on for a while. Why do I care for another one?

[Meadbh]

Quote:

Originally Posted by Danmar Well I think you do have Canada Pension Plan? That is a pension. I can see that having a relatively small pension like CPP might make one a little more conservative. But eventually, if these results continue?? Could always annuitize some of your gains?

I’m just 60 and plan to take CPP at age 65. I will not be entitled to full CPP. If I took it now I would get ~$458 per month. If I wait till 65 I will get ~$639 per month in today’s dollars. Woo hoo!

If I apply for OAS it will almost certainly be 100% clawed back.

Annuities would have to be significantly more attractive than they are now to make sense for me. I will evaluate them again at age 70.

One thing I have to look forward to is a stream of real estate income, once my remaining mortgages have been paid off.

As I have now been ER for 5 years and the sky has not fallen, I may loosen the purse strings a little. Maybe by 0.5%.

[ranchoparque]

Semi-retired at 63 now with pension and DW starting SS a few months ago.

In 2016 and 2017 I actually saved about .8% of year end savings in each of those years. A lot of part time work in those years helped.

After doing a lot of number crunching I am prepared to spend up to 2.8% of my 12/31/17 balance.

I am going with Wade Pfau's conservative SWR recommendation .

Also Vanguard's Nest Egg Calculator gives me a 99% success rate at a 40/50/10 asset allocation for a 30 year period

[tennisplyr]

So call me weird, I have no idea what % I've withdrawn or plans for 2018. I've been retired for 7 years and we basically take out what we need. I don't do a lot of analysis or record-keeping. Granted I retired in a good market. When things get tight, so will we with regards to expenses. No, I don't have millions.

[FlaGator]

Good exercise. I spent more money last year than any of my peak earning years. That ended up being 5.66%. A few periodic/"one time" expenses (new car, GF who is no longer in the picture) boosted it up that high.

With a break on health insurance this year, I expect to come in around 3% when 2018 is done.

[RunningBum]

Quote:

Originally Posted by tennisplyr So call me weird, I have no idea what % I've withdrawn or plans for 2018. I've been retired for 7 years and we basically take out what we need. I don't do a lot of analysis or record-keeping. Granted I retired in a good market. When things get tight, so will we with regards to expenses. No, I don't have millions.

How will you tell if things get tight?

[tennisplyr]

Quote:

Originally Posted by RunningBum How will you tell if things get tight?

I will cut my expenses if my spending/market conditions are making me feel uncomfortable. There are 2 major components to success for me, the physical and the emotional. As I said, I'm not into analysis-paralysis, my life has been great, I believe no matter what life deals me I will figure it out.

[RunningBum]

Quote:

Originally Posted by tennisplyr I will cut my expenses if my spending/market conditions are making me feel uncomfortable. There are 2 major components to success for me, the physical and the emotional. As I said, I'm not into analysis-paralysis, my life has been great, I believe no matter what life deals me I will figure it out.

OK, to each their own. If I did it by feel, I'd probably be cutting back when I don't need to. And if I didn't pay much attention to it, I might wait too long to cut back, and have to make more severe cuts after spoiling myself. Fortunately with the market in the last few years, it's hard to fail.