marko
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Mar 16, 2011
- Messages
- 8,464
This is an academic question, ok?
My understanding of the traditional SWR 'rule' is that on retirement, one takes one's portfolio balance and then withdraws the same X% each year plus inflation for the next 25-30 years.
But for many people, 'retirement' doesn't start on the day after you leave work; there could be a 10 year transition with varying need for funds.
For example:
One spouse could keep working minimizing the withdrawal
Both or one spouse could continue to work part-time, again minimizing the withdrawal
A long-ish severance or other short term income stream might do the same
Meanwhile over that period of transition the portfolio could grow considerably. The last 10 years many portfolios doubled.
So when do you put that stake in the ground and say: "Ok, now we start our real X% SWR from THIS portfolio balance?
I bring this up because for years I thought this is what I was doing when in reality I learned from another thread (thanks audreyh1) that I was actually using a 'percent of portfolio' approach.
I wonder how many people actually stick to that firm "X% plus inflation" from a portfolio calculation made 8 or 9 years ago.
My understanding of the traditional SWR 'rule' is that on retirement, one takes one's portfolio balance and then withdraws the same X% each year plus inflation for the next 25-30 years.
But for many people, 'retirement' doesn't start on the day after you leave work; there could be a 10 year transition with varying need for funds.
For example:
One spouse could keep working minimizing the withdrawal
Both or one spouse could continue to work part-time, again minimizing the withdrawal
A long-ish severance or other short term income stream might do the same
Meanwhile over that period of transition the portfolio could grow considerably. The last 10 years many portfolios doubled.
So when do you put that stake in the ground and say: "Ok, now we start our real X% SWR from THIS portfolio balance?
I bring this up because for years I thought this is what I was doing when in reality I learned from another thread (thanks audreyh1) that I was actually using a 'percent of portfolio' approach.
I wonder how many people actually stick to that firm "X% plus inflation" from a portfolio calculation made 8 or 9 years ago.