David1961
Thinks s/he gets paid by the post
- Joined
- Jul 26, 2007
- Messages
- 1,085
As a fairly new retiree, I have a question, mostly for the folks who have been ER'd for years.
To me, there are two types of withdrawals - one is for the recurring expenses, like food, taxes, shelter, utilities, insurances, etc. I'd even put medical expenses there, even though they will fluctuate from year to year.
The second type of withdrawal is for special expenses that occur infrequently but are pretty big - maybe buying a new car with cash, putting a new roof on the house, replace air conditioning, major trips., major medical expenses, etc.
The total WR needs to account for both types of withdrawals. What I'm planning on is having a total WR of 3% and assuming 2% is from the first "recurring" category and another 1% from the second "infrequent" type. Fortunately, I have not had any major infrequent expenses yet. In thinking about this, I'm estimating that over time, the "infrequent" expenses will be about half of my recurring expenses. Not sure how accurate this is - ask me in 20 years and I'll have an idea. Do you folks break it down this way? How much do you plan for the recurring versus infrequent expenses?
To me, there are two types of withdrawals - one is for the recurring expenses, like food, taxes, shelter, utilities, insurances, etc. I'd even put medical expenses there, even though they will fluctuate from year to year.
The second type of withdrawal is for special expenses that occur infrequently but are pretty big - maybe buying a new car with cash, putting a new roof on the house, replace air conditioning, major trips., major medical expenses, etc.
The total WR needs to account for both types of withdrawals. What I'm planning on is having a total WR of 3% and assuming 2% is from the first "recurring" category and another 1% from the second "infrequent" type. Fortunately, I have not had any major infrequent expenses yet. In thinking about this, I'm estimating that over time, the "infrequent" expenses will be about half of my recurring expenses. Not sure how accurate this is - ask me in 20 years and I'll have an idea. Do you folks break it down this way? How much do you plan for the recurring versus infrequent expenses?