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WR pre-pension and SS
Old 04-07-2014, 07:06 PM   #1
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WR pre-pension and SS

Just curious what Withdrawal Rate ER folks are using before their pension if applicable and social security starts. The reason I am asking the question and my details follow:

I ESR'd back in 2007 with a plan to work part time. My business went well and fortunately / unfortunately grew to produce more than we needed each year so technically I failed at ESR for the last seven years since our WR was negative. I did manage to keep the work to an average of 18hrs per week but concentrated to the colder months during the school year so that I was free whenever the kids were out of school. I just turned 50 and have had enough again. It in many ways is what I always wanted out of work but I am ready to be free of w*rk. I hope to find my customers someone else within the next year and fully ER within a year or so allowing more time for the volunter gigs we have started.

We can definitely get by on 4% at that point as the budget has lots of padding. At 55 our pensions kick in and that would drop the WR a good bit. If we take SS at 62 our projected WR with the pensions will be about 1% going forward.

We have two homes now both paid for and expenses accounted for in the budget. I have tracked all expenses for the last 28 years so I am very comfortable in our budget estimates. We do plan to downsize to one home in the next ten years and that would drop our WR to .5% or less once SS starts.

So back to my questions is 4% for four years then much less a safe withdrawal rate for a planned 44 year retirement? That puts us to 95 years old.
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Old 04-07-2014, 07:17 PM   #2
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I don't get it.

Unless your goal is to leave a large estate to your kids or charity (an OK option, but not stated above), why not keep the 4% (or even 3%) withdrawal rate rather than dropping toward 0.5%?

The money is yours to spend, enjoy it.
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Old 04-07-2014, 09:20 PM   #3
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Sounds like you have a good belt AND suspenders!
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Old 04-07-2014, 09:24 PM   #4
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You can enter your income stream timing into FIRECalc and get a safe withdrawal amount from it. You can definitely exceed 4% for the first few years and still hit 100% success. Especially if you're down at 1% long term.

I, and a few others here, are at 6% or more for a few years. I have a pension in a year or two, SS in 10 and 15 years, and a kid with college expenses now. No way to hit 4% with that. I put it all into FIRECalc and came out fine, >4% early, <4% later. Just keep in mind that you want to be a bit conservative, like a big cash bucket, so that a market drop when you're withdrawing 6%+ doesn't kill you.
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Old 04-07-2014, 10:12 PM   #5
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When I ER'ed I had an immediate 3 small pensions with another 4 streams of pensions / SS between the 2 of us due over the first 15 years of retirement. I didn't look to any SWR % but put all the info into FIRECALC and a couple of other calculators, with my planned expenses, and checked on probabilities of success.

The projections are that I draw down a lot more in the early years before the extra pensions start coming. 7 years to the first, then a year to the next, then 4 years and then 3 years.

PS
3 of the "pensions" are US SS for DW and myself, plus UK SS for myself.
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Old 04-07-2014, 10:21 PM   #6
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Quote:
Originally Posted by fisherman View Post
....So back to my questions is 4% for four years then much less a safe withdrawal rate for a planned 44 year retirement? That puts us to 95 years old.
You're fine. Quit fretting and enjoy your retirement.
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