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I am currently in my 4th year of retirement; now in our early 50's. At the time I retired, I had a plan which was not really based on SWR of initial portfolio value, but rather QFP forecasts; similar to Bob_Smith.
These days, I base my "annual budget" on 3% of 'portfolio value + NPV of pension and Social Security estimates'. Wife still works part-time which reduces withdrawal from the portfolio. Looks as if for this year, we will only be spending approximately 1.2% of last January's portfolio value + NPV estimates.
So as we did before retirement, we seem to continue to live below our means. During our 50's I intend to limit our "budget" to 3% of whatever the Jan 1 asset value offers. I know that someday we will have to replace the car and need to spend large dollars for the purchase.
As long as I don't stray too far from my QFP benchmark, I'll feel farily comfortable to this strategy. I figure that when we turn 60, I'll probably up the budget to 3.5% of assets. And if we find our portfolio getting too fat, I guess we will just have to splurge on something.
Cheers,
Red
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