5% Withdrawal Rate Portfolio

cooch96 said:
If I make it to 70, and medical science hasn’t made any extraordinary leaps in the next couple of decades, I’d be very comfortable with a 10% wr. And it would have to something revolutionary we haven’t seen since penicillin. Most men in my family, both sides, pass in their 60s or early 70s. If I make it to 80, pop the champagne and go to 20%.
Click to expand...

Careful. "Past performance is no guarantee of future results." :)

And FWIW, if you go to 10% at 70 and make it to 80, FIRECalc says on average your portfolio will be down by more than 60% - so you will almost certainly need a WD rate of 20% or more to make ends meet. ;)
 
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Ok time for the 4th Quarter 2017 Update:

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 3/5/2017 $156.00/mo
Total Distributions:———————$4,543.00

Portfolio Value @ 12/31/17: $40,776.25
DNP : $28,034.16 --- 2,442 Shares
SDOG: $6,610.5 ----- 150 Shares
RVT : $ 6,631.80 ------- 420 Shares
MMKT : $741.25

Distributions received since last report:$680.42 Payments made 468.00
The withdrawal rate on the value of the portfolio is now 4.59%
---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 12/31/17: $39,162.96

VWLEX $38,850.96 883.12 Shares
MMKT: $312.00

Distributions reinvested since last report: $1,731.19 41.24 Shares@ 41.98
The withdrawal rate on the Wellington portfolio is now 4.78%
The Runningman portfolio had some trouble with the interest rate increases in the 4th quarter while Wellington road the stock market to a profitable outcome.
 
Due to request I will update this thread:
For Annual Portfolio Adjustment:

For the real portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150/mo Payments @ 3/23/18 $159.00

Portfolio Value @ 02/28/18: $38,747.52 - Pre Adjustment
DNP : $24542.10 --- 2,442 Shares
SDOG: $6,802.50 ----- 150 Shares
RVT : $ 6,661.20 ------- 420 Shares
MMKT : $746.71


---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 02/28/18: $38,536.68 Pre Adjustment

VWLEX $38,536.68 924.36
Shares
MMKT: 0.00

Shares@ 41.69
__________________
The CPI all items inflation index has increased 2.07% over the last 12 months ending January so the increase for the payout is increased to $159.00 (rounded to nearest dollar)
This resulted in the need for $1,908 in the Wellington portfolio so 45.77 shares are sold and the funds placed in MM account. There are now 878.60 shares in the Wellington Portfolio.

For the Running Man portfolio an additional 73 shares in DNP were purchased @ 10.05 with a $4.99 commission for a total of $738.64 leaving $8.07, the increased dividend payments from DNP will not begin until the March 28th ex dividend date for April 10th payout. RVT and SDOG were left as is, at 16.85% and 15.97% of portfolios they are within a good range of the 16.7% desired amount. So there are now 2,515 shares of DNP paying monthly dividend of $163.50 for the $159 monthly payment. Originally there were 2,308 shares of DNP increase in shares is 9 percent, exceeding inflation increased payments over the period of 6 percent. The cap for payout will rise to $168.80 for 2019 when the portfolio's will next be realigned.

Overall the two portfolios performance is about equal.
 
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1st Quarter 2018 Update:

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 3/5/2018 $159.00/mo
Total Distributions:———————$5,496

Portfolio Value @ 03/31/18: $38,926.13
DNP : $25,854.20 --- 2,515 Shares
SDOG: $6,549.00 ----- 150 Shares
RVT : $ 6,337.80 ------- 420 Shares
MMKT : $185.13

Distributions received since last report:$653.52 Payments made 471.00
The withdrawal rate on the value of the portfolio is now 4.90%
---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 3/31/18: $36,744.70

VWLEX $36,224.44 883.52 Shares
MMKT: $1,749

Distributions reinvested since last report: $206.82 4.93 Shares@ 41.98
The withdrawal rate on the Wellington portfolio is now 5.02%


22278
 
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2nd Quarter 2018 Update:

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 3/5/2018 $159.00/mo
Total Distributions:———————$5,973.00

Portfolio Value @ 06/30/18: $40,533.29
DNP : $27,111.70 --- 2,515 Shares
SDOG: $6,400.50 ----- 150 Shares
RVT : $ 6,636 ------- 420 Shares
MMKT : $385.09

Distributions received since last report:$673.96 Payments made 477.00
The withdrawal rate on the value of the portfolio is now 4.71%
---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 6/30/18: $37,771.26

VWLEX $36,499.26 890.01 Shares
MMKT: $1,272

Distributions reinvested since last report: $269.30 6.49 Shares@ 41.52
Withdrawal Rate is now 5.05

The Runningman portfolio had a slightly better 2nd Quarter than Wellington, but with the time frame I am posting this Wellington is going to have a good third quarter.
 
4th Quarter 2018 Update:

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 12/31/2018 $159.00/mo
Total Distributions:———————$6,291.00

Portfolio Value @ 12/31/18: $37,786.67
DNP : $26,156.00 --- 2,515 Shares
SDOG: $5,869.50 ----- 150 Shares
RVT : $ 4,956.00 ------- 420 Shares
MMKT : $805.17

Distributions received since last report:$1,374.10 Payments made 954.00
The withdrawal rate on the value of the portfolio is now 5.05%
---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 12/31/18: $35,955.38

VWLEX $35,955.38 960.06 Shares
MMKT: $318.00

Distributions reinvested since last report: $2,659.13 70.05 Shares@ 40.98/37.29
Withdrawal Rate is now 5.31%

The Runningman portfolio had a slightly better year than Wellington, dropping $2,989.58 vs the loss of $3,207.58 for the Wellington. Top value at month end was September @ $42,694.51 Wellington was $38,378.24. During the month of January 2019 the Runningman portfolio recovered nearly $3,000 to $40,737 while the Wellington portfolio underperformed by increasing $1,500 to $37,409. RVT has underperformed the market and the Russell 2000 in the last 12 months putting a bit of a drag on the portfolio. Next update will be the annual realignment at the end of February.
 
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Ok time for Annual Portfolio Adjustment:

For the real portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150/mo

Portfolio Value @ 02/28/19: $42,035.28
DNP : $28,696.15 --- 2,515 Shares
SDOG: $6,519 ----- 150 Shares
RVT : $ 6,006.00 ------- 420 Shares
MMKT : $814.33


---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 02/28/19: $36,959.17

VWLEX $38,219.94 960.06 Shares
MMKT: 0.00

Shares@ 39.81
__________________
The CPI all items inflation index has increased 1.6% over the last 12 months ending January so the increase for the payout is increased to $162.00 (rounded to nearest dollar)
This resulted in the need for $1,944 in the Wellington portfolio so 48.83 shares are sold and the funds placed in MM account. There are now 911.63 shares in the Wellington Portfolio, an increase of 2.5% shares over the course of the year.

For the Running Man portfolio an additional 70 shares in DNP were purchased @ 11.41 with a $4.99 commission for a total of $803.69 leaving $10.44, The increased dividend for DNP will not begin until the March 25th ex dividend date for April 10th payout. RVT and SDOG were left as is, at 15.51% and 14.29% of portfolios they are within a range of the 16.7% desired amount,however next year may require use of the funds for RVT if present trend continues. The cap for payout will rise to $173.89 for 2020 when the portfolio's will next be realigned.

Overall a strong win in 2018 for the Running Man portfolio as DNP had a significant return. The Running Man portfolio grew by about $3,300 dollars while the Wellington Portfolio lost a few hundred in the up and down past year.
 
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audreyh1 said:
Another thing is that if your portfolio suvival period drops to 25 years, and then 20 years, you can draw more anyway as long as you have a reasonably diversified portfolio.
Click to expand...

Absolutly. At 70 I would have no qualms about pulling 5% inflation adjusted.
 
Sunset said:
Wow.... that article just tosses out percentages like 8% draw without any math or parameters (like being 85 yrs old) to back up the statement.

That is pretty irresponsible. :cool:
Click to expand...



It’s all good as long as you hire a professional and you can’t have a mortgage or debt of any kind.
 
2nd Quarter 2019 Update:

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,375.90):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 12/31/2018 $162.00/mo
Total Distributions:———————$7,257.00

Portfolio Value @ 06/30/19: $43,311.33 + $1,099 in 2nd Qtr
DNP : $30,554.70 --- 2,585 Shares
SDOG: $6,525.00 ----- 150 Shares
RVT : $ 5,860.40 ------- 420 Shares
MMKT : $385.23

Distributions received in 2nd Qtr:$678.63 Payments made $486.00
The withdrawal rate on the value of the portfolio is now 4.48%
---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 6/30/19: $39,472.58

VWLEX $38,176.58 923.25 Shares
MMKT: $1,296

Distributions reinvested since last report: $253.12 +6.16 Shares @ 41.08
Withdrawal Rate is now 4.92%

The Runningman portfolio is now $3,800 ahead of the Wellington Portfolio. Runningman Portfolio is in a better long term position than previously and both portfolio's are meeting their goals without any indication of trouble, although the market has been only up in the 4+ years this has been occurring. But there is more of a cushion and less years to provide!

3rd Qtr 2019 Results to be provided very soon.
 
3rd Quarter 2019 Update:

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,375.90):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 09/30/2019 $162.00/mo
Total Distributions:———————$7,743.00

Portfolio Value @ 09/30/19: $46,178.31 + $2,866 in 3rd Qtr
DNP : $33,243.10 --- 2,585 Shares
SDOG: $6,577.50 ----- 150 Shares
RVT : $ 5,779.20 ------- 420 Shares
MMKT : $584.53

Distributions received in 3rd Qtr:$679.28 Payments made $486.00
The withdrawal rate on the value of the portfolio is now 4.21%
---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 9/30/19: $40,200.04

VWLEX $40,200.04 929.01 Shares
MMKT: $810

Distributions reinvested since last report: $244.39 +5.76 Shares @ 42.46
Withdrawal Rate is now 4.84%

The Runningman portfolio is now $5,978 ahead of the Wellington Portfolio.

For those interested the Wellington portfolio consists of 91 stocks at 9/30 but over 1000 bonds!. Top 10 stock holdings which represents an excess of 20% of the total value of the funds are:
1 Microsoft Corp.
2 Verizon Communications Inc.
3 JPMorgan Chase & Co.
4 Bank of America Corp.
5 Alphabet Inc.
6 Comcast Corp.
7 Chubb Ltd.
8 Chevron Corp.
9 Medtronic plc
10 AstraZeneca plc

At some point I thought we would see a major market correction lasting a couple years but perhaps not anymore....From the start of the portfolios the Running Man Portfolio is up $9,802.40 Wellington $3,824.50. My take is this is due to the continued low interest rate environment which is tending to increase asset value of CEF DNP to an actual premium, which is not sustainable in the long run. However that over valuation is probably about $4,000 of the nearly $6,000 difference, so I think there is still a little bit of cushion for the long run. Both portfolios are still in excellent position to meet the long term portfolio goal.
 
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Running_Man said:
3rd Quarter 2019 Update:

At some point I thought we would see a major market correction lasting a couple years but perhaps not anymore....From the start of the portfolios the Running Man Portfolio is up $9,802.40 Wellington $3,824.50. My take is this is due to the continued low interest rate environment which is tending to increase asset value of CEF DNP to an actual premium, which is not sustainable in the long run. However that over valuation is probably about $4,000 of the nearly $6,000 difference, so I think there is still a little bit of cushion for the long run. Both portfolios are still in excellent position to meet the long term portfolio goal.
Click to expand...

If you were to start this portfolio today would you still use DNP given its large premium?
 
Theo said:
If you were to start this portfolio today would you still use DNP given its large premium?
Click to expand...

Interesting Question, the stock market has done nothing but go up since this portfolio was started and interest rates down, so 5% withdraswal I would not suggest with this portfolio today at this time. As DNP is probably about 20% too high I would say 4% is the best this portfolio would do, if I was starting now I would wait a year or two and in that time I expect DNP will come back to the range where 5% would be effective again.

Although if established I would hold on to it as the portfolio shows no real signs of failing and will do ok in a market decline or an inflationary surge.
 
The first thing I want to do is to thank you for this thread. I am invested in DNP and RVT and I definitely consider them good investments.


Now I want to ask you a question about the automatic reinvestment of these dividends.


This came up for two reasons:

  1. Fidelity sent me an e-mail giving me the option of not doing the auto reinvestment. Their e-mail said that Royce will set the reinvestment price on the 19th and I have until the 18th to stop the auto reinvestment.
  2. Reason two is that RVT is currently on a price growth spirt.

So I looked back at the reinvestment prices for the first 3 quarters of this year and here are the results:
RVT.jpg


All prices are actual closing prices, not adjusted closing prices.

The numbers in the third columns for each quarter are the average prices paid on the reinvestment dates. They fundamentally match the yellow flags under each price. If you look at the data for the previous 3 quarters:

  • The price drops on each dividend date as expected.
  • The price then seems to recover over the next week or two at least until the date when RVT sets its reinvestment price!
  • When you compare the actual closing prices to the reinvestment prices on the reinvestment dates you paid Royce surcharges of 1.59%, 1.62% and 2.06% for the first three auto-reinvestments!
·

So, my question is: Am I looking at the data correctly? Should I just handle each reinvestment myself and save the surcharge?


Either way, I still going to keep all of my RVT investments!


Thanks again for your research on the investments in this thread. I will continue to follow your thread!

Sandy
 
I do not use the auto reinvestment feature. The price changes on the date of ex dividend trading in September on September 12th.

Since Fidelity does not now have a commission on the purchase of RVT I would just take the dividends and have money set aside to purchase the reinvest of RVT on the day it goes exdividend and use the dividend to refund for the next quarter, and you will have full advantage of the dropping of the price due to dividend issuance and not have the time weighted change in price that occurs and is forced higher by the artificial demand of dividend re-investment. You would probably end with more shares over time.

RM
 
4th Quarter 2019 Update: Time for year end update

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,375.90):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 09/30/2019 $162.00/mo
Total Distributions:———————$8,229.00

Portfolio Value @ 12/31/19: $47,007.13
DNP : $33,243.10 --- 2,585 Shares
SDOG: $6,577.50 ----- 150 Shares
RVT : $ 5,779.20 ------- 420 Shares
MMKT : $768.78

Distributions received in 4rd Qtr:$676.28 Payments made $486.00
The withdrawal rate on the value of the portfolio is now 4.14%
---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 12/31/19: $41,739.57

VWLEX $41,435.17 955.17 Shares
MMKT: $324

Distributions reinvested since last report: $1,138 +26.16 Shares @ 43.50
Withdrawal Rate is now 4.66%

The Runningman portfolio is now $5,247 ahead of the Wellington Portfolio
 
1st Quarter 2020 Update - the 5th Anniversary knock on wood for the gift of the portfolio that keeps giving:

We'll bleed the 2020 results & postings over a few days for suspense value in honor of Willie Wonka.

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,375.90):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 03/31/2020 $165.00/mo updated and rounded up 1.6%
Total Distributions:———————$8,708.00

Portfolio Value @ 3/31/20: $34,984.31
DNP : $25,943.50 --- 2,650 Shares 65 shares bought at annual rebalance
SDOG: $4,675.00 ----- 150 Shares
RVT : $ 4,061.40 ------- 420 Shares
MMKT : $243.91

Distributions received in 1st Qtr:$690.83 Payments made $489.00

---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 3/31/2020: $35,737.63

VWLEX $33,922.63 914.36 Shares
MMKT: $1,815.00

Distributions reinvested since last report: $243.11 +7.23 Shares @ 37.10


The Runningman portfolio is now behind of the Wellington Portfolio as of March of the early Corona Virus show. Reinvested the Running Man portfolio in additional shares of DNP. Dividends will now be $172.25 which will be more than 3 percent ahead of this years 165 monthly payout. $31,101 is the all time low value for the Running_Man portfolio so this was a tough quarter, I think we all know it is going to be recovery from here, but how much? How will Wellington perform......stay tuned
 
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