at 1.5% withdraw rate, will my money last ?

[targatom2019]

I retired at 50 July 2019 and was able to build a PF 50x my annual expenses in 100% equities and 2x in CD so my AA was around 96/4 but due to the correction my PF is now 40x in equities and 2x in CD. If I withdraw <1.5% per year then will I ever run out of money ?


Thanks

 

[REWahoo]

How long will you live?

 

[targatom2019]

How long will you live?

I probably live to 85 but like to leave some to my only 24 daughter and that's the reason why I am in 100% equities.

 

[pb4uski]

You could put 75% (1.5%*50 years) in safe, fixed income and the other 25% in stocks and that should be pretty bulletproof.

Or if you really believe 85, then 53/47. Or something in between.

 

[statsman]

Any chance you might want to gift to your DD along the way?

 

[Ready]

There has never been a period in history where a 1.5% withdrawal rate failed. Even 3% has survived the worst periods in history.

We can’t predict the future so there are no guarantees but that is so low that even the most conservative members on this forum would tell you not to worry about it.

Now if you had asked me back in July if I think a 96% equity allocation for a 50 year old fully retired person is a good idea...that would have been another conversation.

 

[SecondCor521]

There has never been a period in history where a 1.5% withdrawal rate failed. Even 3% has survived the worst periods in history.

We can’t predict the future so there are no guarantees but that is so low that even the most conservative members on this forum would tell you not to worry about it.

Now if you had asked me back in July if I think a 96% equity allocation for a 50 year old fully retired person is a good idea...that would have been another conversation.

+1, although as a 50 year old fully retired person with an ~1% WR (so stats very similar to OP), I think it can be a reasonable choice under certain very limited circumstances (which, of course, I think I fall into).

 

[FANOFJESUS]

I retired at 50 July 2019 and was able to build a PF 50x my annual expenses in 100% equities and 2x in CD so my AA was around 96/4 but due to the correction my PF is now 40x in equities and 2x in CD. If I withdraw <1.5% per year then will I ever run out of money ?


Thanks

I think your idea is ok but I would get that cash up to 6 years. In the 2000-2002 bear it took stocks 5 years to break even. If you go to 60/40 the break even is only about 2.5 years.

 

[targatom2019]

I think your idea is ok but I would get that cash up to 6 years. In the 2000-2002 bear it took stocks 5 years to break even. If you go to 60/40 the break even is only about 2.5 years.

Thanks, I plan to get it up to 5 years in CD when the market comes back.

 

[GravitySucks]

I retired at 50 July 2019 and was able to build a PF 50x my annual expenses in 100% equities and 2x in CD so my AA was around 96/4 but due to the correction my PF is now 40x in equities and 2x in CD. If I withdraw <1.5% per year then will I ever run out of money ?


Thanks

Boy I hope so.
If your 1.5% doesn't hold I won't be eating cat food, I'll have to be trapping and eating cats!

 

[Dtail]

You could always sell the Porsche.

 

[JustKickItForward]

We are very similar to OP, although we are in transition period vs FT ER. I really hope your plan works, otherwise I will be in very bad shape in 20+ yrs

 

[DrRoy]

Boy I hope so.
If your 1.5% doesn't hold I won't be eating cat food, I'll have to be trapping and eating cats!

I think that covers it.

 

[ncbill]

Boy I hope so.
If your 1.5% doesn't hold I won't be eating cat food, I'll have to be trapping and eating cats!

Is this you?

 

[street]

In my opinion if 1.5% WR isn't safe then there will be a lot of people starving to death because a lack of cats and dogs to eat.

Like others have said, with history as we know it today, you are golden.

 

[Dtail]

Is this you?

Looks more like DFW_M5.

 

[GravitySucks]

Is this you?

Old photo. I had the mole on my snout removed and my eye brows are bushier.

 

[ut2sua]

I retired at 50 July 2019 and was able to build a PF 50x my annual expenses in 100% equities and 2x in CD so my AA was around 96/4 but due to the correction my PF is now 40x in equities and 2x in CD. If I withdraw <1.5% per year then will I ever run out of money ?


Thanks

I think the only way your $ won't last is if you will make multiple mistakes going forward. Sell large % of your NW at low, buy large % of NW at high. If you do so a few times, your NW could be reduced significantly. This is why the common wisdom has been to not do much during rough time. Buying/Selling low % of NW as you have planned should be fine.

 

[harley]

There has never been a period in history where a 1.5% withdrawal rate failed. Even 3% has survived the worst periods in history.

But, but, but...it's different this time!

 

[targatom2019]

I think the only way your $ won't last is if you will make multiple mistakes going forward. Sell large % of your NW at low, buy large % of NW at high. If you do so a few times, your NW could be reduced significantly. This is why the common wisdom has been to not do much during rough time. Buying/Selling low % of NW as you have planned should be fine.

I have been a buy and hold guy for over 25 years and get more aggressive on buying in a down market. I am most likely use up emergency funds first before starting with draw.