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SWR for the Class of 2010?
Old 03-29-2010, 09:03 PM   #1
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SWR for the Class of 2010?

Congratulations again to the 2010 retirees. Am struggling to answer the SWR question for myself. I wonder what the 2010 class is considering. Would appreciate your response. Other recent er may join in as well.

Budget for retirement?( may leave out if not comfortable with this)

Savings on hand as multiple of budget? ?25x or other

Planned WR 4% or 3% etc

Spending model: ?Constant Spending Power, ?Percentage of remainging Portfolio, ?other method

What online tools you've used for determining your numbers(firecalc, etc)

Number of years planned for retirement/age planned till.

Thanks for your input

torres9
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Old 03-29-2010, 09:43 PM   #2
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If you do a search on SWR, you will find a lot of threads to read.

As for me (age 61, retired in November, 2009), I tend to be a little conservative with asset allocation and withdrawals. Right now I am withdrawing 3.5% temporarily until I claim Social Security, and after that I will withdraw 3.0%.

So far I am not spending even half that much, but I think I will enjoy making the effort.
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Old 03-29-2010, 10:07 PM   #3
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About 4.3% annually as a percent of total assets (a la Clyatt) eventually. Floor at 95% of previous year's WR. For now, part-time work should pay most of the bills.

Firecalc helped a lot.

35 year retirement horizon.

Hope that helps.
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Old 03-30-2010, 05:54 AM   #4
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I am nearly 55 and have a pension (non COLA). My initial wr will be 3.8% but will go up when my two boys enter college and go down when SS kicks in at 70. Both my wife and I have a SS benefit and she gets a pension at 65. So we have a substantial amount of income from our 4 pensions and will not be relying solely on our portfolio.

We have 18x our total annual spend and 25x our annual spend net of pension and are planning for 43 years (wife is 52 and planning to her 95). Have used FIREcalc, Fidelity Retirement Income Planner, Vanguard's free CFP financial plan, and a fee paid financial planner. I guess maybe I have over analyzed. Of the tools above, I rate them:

1) Fido RIP
2) FIREcalc
3) Vgd
4) financial planner (he used ***gasp*** constant return on portfolio ala Bernstein's retirement plan from Hell - but he was a great deal of help on estate plan, A/B trust etc)

Also read 4 Pillars and Jim Otar's book in PDF form - both very helpful.

Ohh, forgot to mention I also downloaded the free trial version of Jim Otar's calculator. It is a lot like FIREcalc but has a lot more features. Turns out in the free version your current age is fixed at 55. Since I turn 55 in July, I saved the $99 and used the free version. I am not done playing with it so won't include it in my ratings above but my initial thoughts would be to put it above FIREcalc but below FIDO RIP. I really like RIP because it allows you to build a detailed retirement budget and vary it year by year. FIREcalc allows you to vary your spend year by year if you contribute (which I did) but it doesn't have the detailed budget spreadsheet integrated the way FIDO RIP does. You have to build it out yourself and transfer the bottom line to FIREcalc. Also RIP takes taxes into account which FIREcalc does not.
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Old 03-30-2010, 07:40 AM   #5
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Since DW's ER this year effectively adds me to the class of 2010 I will respond (haven't had to tap funds in the previous 5 years since I retired). We are following R-I-T's "Clyatt" approach but using a 4% rate (initially). So far it seems like we should end up with a substantial surplus that we can put in our "mad money" fund for future downturns/extravagances.
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Old 03-30-2010, 08:20 AM   #6
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Quote:
Originally Posted by torres9 View Post
Congratulations again to the 2010 retirees. Am struggling to answer the SWR question for myself. I wonder what the 2010 class is considering. Would appreciate your response. Other recent er may join in as well.
I retired in early 2007 (my DW will soon join me) so I'll join the conversation.

Quote:
Originally Posted by torres9 View Post
Budget for retirement?( may leave out if not comfortable with this)
We planned for 100% of our pre-retirement net income (emiminates all the trash taxes/deductions/contributions), adjusted upward annualy for our "personal rate of inflation" (established through budget variation analysis, year over year).

Quote:
Originally Posted by torres9 View Post
Savings on hand as multiple of budget? ?25x or other
That dosen't compute in our actual life. We currently have only a few of our eight retirement income sources on-line at this time (e.g. pensions, SS, etc.) The 25x (e.g. 4% rate) dosen't work for us.

Quote:
Originally Posted by torres9 View Post
Planned WR 4% or 3% etc
Currently above 4%, and forecast to increase to 6.5% at age 70 (DW/me are the same age). At that time (after all income sources available), WR drops to 1.26% and stays below 4% till the end of our plan (30 additional years, till age 100).

Quote:
Originally Posted by torres9 View Post
Spending model: ?Constant Spending Power, ?Percentage of remainging Portfolio, ?other method
Variable (as stated above). We have not (in three years) been adhering to a specific withdrawl rate. BTW, actual vs. plan has been at a lower WR, so I guess we're doing OK.

Quote:
Originally Posted by torres9 View Post
What online tools you've used for determining your numbers(firecalc, etc)
FIRECalc, F.E., RIP, spreadsheet.

Quote:
Originally Posted by torres9 View Post
Number of years planned for retirement/age planned till.
As stated above, till age 100 (even though I know we won't reach it - but we're conserative). For me, it would be 41 years. For my DW? Have to wait till she get's tired of wo*king before I could tell you.

Quote:
Originally Posted by torres9 View Post
Thanks for your input.
You're certainly welcome
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Old 03-30-2010, 08:45 AM   #7
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I retired in late 2008 at age 45.

My overall SWR (including my currently untouchable-for-another-12-years IRA) is about 2.5%. As a percent of my taxable mutual funds, it is about 3.5%. Most of my income is from a bond fund I invested the proceeds of company stock I sold (just before it crashed) when I left my old company in late 2008.

These SWRs will rise gradually in the next 12 years, although the recent HCR passage will hopefully make a dent in what I pay for HI. Once my frozen pension and SS begin in the 2020s, my SWR will drop again.

I created my own spreadsheet to create a current budget and project expenses (medical versus everything else so I can set up separate inflation rates) based on what I learned from the Fidelity Retirement Plannning software. This spreadsheet projects income and expenses through age 65 because it is those years just before all my "reinforcements" (pension, SS) arrive which will be the most challenging. I plan to run surpluses (dividend income versus current expenses) in these early ER years because I will probably run deficits in the later ones prior to age 60-65.
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Old 03-30-2010, 09:20 AM   #8
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I retired (I think) in late 08 at 45. I haven't done it yet, but I plan to take up to 5% SWR because I have property to sell (vacation home) and, depending on my mood, a family trust to rely on. (Because I have a disabled sibling, my family set up a trust, and then included everybody in the trust to different degrees. It's all openly discussed.)

But I am finding I want to use my intellect more than I am doing, so I signed up for pro bono work in my field, and that morphed into a per case payment from the state. And I am writing a couple books with no concern about the money part of it.
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Old 03-30-2010, 09:45 AM   #9
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Looks like 2.6%, if we sit here in high-priced NYC and live more or less like we did last year. But we're not going to do that. Full-time RVing looks like it will cost the same, or less, than what we spent last year after all changes are factored in (much lower cost health insurance, no electric bill, no parking rent, but campground fees, higher gas expense, etc.) We'll also be able to rent out our condo, which will drop our WR down to about 1.3%. Modest freelance income should cut that down to 0.9%. And we're using that as a cap. We expect we'll be able to spend less, but we'll see how that turns out 12 months from now.

65 year retirement planning horizon.
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Old 03-30-2010, 11:51 AM   #10
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I retired Jan.2008 and I use the Claytt 4% . I even stuck with the 4% after the meltdown so my budget went down from the first year but it really did not bother me and I felt more comfortable doing that than sticking with my original number and adding a cost of living each year . I do have a pension so that softened the blow and So far each year I 've had an excess at the end to roll into mad money . I have enough in my mad money right now to buy one of those RV things you guys are always talking about .
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Old 03-30-2010, 11:55 AM   #11
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According to the IRS and social security I haven't worked in a decade or more. Guess I'm lazier than most, because every now and again the rentals have felt like work. Did bring on a manager, a young man I expect to end up owning some or most of the rentals, about the middle of last year and have been shifting most of the "issues" to him, so maybe i'm retired. A few years ago i did a budget of our spending on utilities, food, phones, fuel; added in a guestimate for monthly insurance, car payments, and a home purchase, and started plugging the numbers into Quicken 2006 version Retirement planner. Used a 4% inflation rate, a 6% growth on investments prior to retirement, and 5.5% after. Told Quicken we wanted to live to 93 (MIL is almost 95). Also told Quicken we would sell the properties on my 60th birthday, 11/2009. Quicken has been dutifully reporting that our plan fails a few years before we kick off.

Just went in and jiggered the numbers, telling Quicken we wouldn't sell properties till i turn 64 and all of a sudden our plan succeeds! Tells me i suck at planning or Quicken does or its all about the assumptions. Doesn't really matter much - been informed i am to stay in the game by one who knows me. Something about me not being satisfied or trusting of a set stipend.
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Old 03-30-2010, 01:37 PM   #12
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I retired on 1/30/2010 and am fortunate to have a pension which is adequate for me to live on. I do not plan to withdraw anything from my retirement accounts for another 10-15 years so my SWR is 0 for now.
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Old 03-30-2010, 02:23 PM   #13
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Budget for retirement?( may leave out if not comfortable with this)
$100K which includes taxes, $30K is discretionary.

Savings on hand as multiple of budget? ?25x or other
I have 4 pensions (all non-COLA), and I am starting with savings that are 56x needed annual withdrawal.

Planned WR 4% or 3% etc
Year 1 WR is 1.8%

Spending model: ?Constant Spending Power, ?Percentage of remainging Portfolio, ?other method
Constant spending power, so future withdrawals will increase with inflation on everything as pensions are not COLA'ed

What online tools you've used for determining your numbers(firecalc, etc)
Early years I used Financial Engines, free through my Vanguard account, then found FIRECALC, and Fidelity retirement income planner through DW's Fido account. I no longer use Financial Engines.

Number of years planned for retirement/age planned till.
40 (ages 55 to 95)


The reason for the very conservative SWR was the golden handcuffs from Megacorps in that I held on for a few years (after FIRECALC said I was okay) in order to get the pension and retiree health insurance starting at 55.
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Old 04-04-2010, 01:53 PM   #14
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Thanks all for ur feedback.

W2r: wanted to get a feel for what current retirees are looking at re swr.

RiT: congrats on ur retirement, i am considering Clayatt's formula as well but not sure what others are doing. I would be looking at a 35-40 yr retirement to age 90 for me and dw.

Will look up fido FTP, I have 401 k thru fidelity. I have used vanguard fp and will do a Fu with them. it looks like a lot of folks are well prepared for RE with low sir's. Am cosidering pt work to lower my initiai swr. Am not very handy with spreadsheets in regards to using varying inflation rates.

Alan: Congrats, you seem well prepared for fire! I'm a big soccer fan, LiverpoolFC!

Do you still follow Bradford city or Leeds? hoping England do well at the world cup but also like Spain and Brazil

YNWA
torres9
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Old 04-04-2010, 03:38 PM   #15
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Alan: Congrats, you seem well prepared for fire! I'm a big soccer fan, LiverpoolFC!

Do you still follow Bradford city or Leeds? hoping England do well at the world cup but also like Spain and Brazil

YNWA
torres9
Thank you - I'm loving retirement so far

Liverpool fan eh, does that explain the user name, Torres? I see that they had a tough game today and could only manage a draw with Birmingham, with Torres being sub'ed after 65 minutes because of exhaustion. Liverpool is definitely my favorite of the "big 4" in the Premier League. I do still follow the fortunes of both Bradford and Leeds, but my home club, that I cheer for most, is Sunderland. My son and I watched them live yesterday on Fox Soccer Channel against Tottenham.

I also favor Spain and Brazil in the world cup. England's opening game in the Finals this year is going to be against the USA. Last time they met in a World Cup game was in 1950, when the USA won
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Old 04-04-2010, 04:59 PM   #16
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Am a huge Liverpool fan. Watch all their games. Not sure why Rafa subbed nano today, ngog missed 3 chances! Sunderland are doing ok, good result against spurs, helped Liverpool,'s chances for 4 th.

Liverpool best game last wknd, beating sland 3-0, torres first was amazing!

Looking forward to benefica later this week.
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Old 04-04-2010, 09:18 PM   #17
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Am a huge Liverpool fan. Watch all their games. Not sure why Rafa subbed nano today, ngog missed 3 chances! Sunderland are doing ok, good result against spurs, helped Liverpool,'s chances for 4 th.

Liverpool best game last wknd, beating sland 3-0, torres first was amazing!

Looking forward to benefica later this week.
Torres is on top of his game, I think he subbed him to have him fully fit for Benfica, 'cos I think he needs a trophy and also 'cos he's given up on 4th spot. 5 games left, 4 pts behind Man City and they've played a game extra - he needs the Europa League title.

I'll be cheering them on
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