NW-Bound
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 3, 2008
- Messages
- 35,712
The 4% 'rule/suggestion' is another thing that gives me pause and makes me question the FC and FRP results because for the first few years, we will be over 4%. But once SS kicks in, that percentage falls to 4 or less. I realize that over a 30-35 year period the average may work out to 4% but it concerns me (needlessly more than likely) that we can't be at 4% from day one and every year afterwards. Just another thing that makes my 'OMY thinking' to kick in.
FIRECalc will allow you to enter in future SS. It can then tell you that you can go higher than the 4% WR initially, then reduce the amount withdrawal when SS kicks in, such that your spending stays constant.
It also helps if your spending contains a lot of discretionary items that you can cut back in tough years. People say that the amount cut back will not amount to much in the big scheme, and I agree with that in principle. It's because it does not matter much if you cut down to 3% WR from 4%WR, when your stash takes a 10 to 20% haircut. But mentally, to keep on spending when your stash takes a 10% or 20% haircut is tough.
And then, in good years when you get 10-20% jump, do not go out and splurge it all. That should be saved for bad years, which for sure will happen although we do not know when.