bltkmt
Recycles dryer sheets
I see - thanks.
I always considered a 4% as a rule of thumb... because it has some things that don't apply to me.
* assumes a 30 year retirement. (I retired at 52, so hope for more than 30 years before I run out of money).
* gives a 95% success of dying with >$0. That 5% worries me.
I think for safety a 3-3.5% WR is better if you have a longer retirement horizon.
FIREcalc and all the other retirement calculators are to be used with a grain of salt. I would never be comfortable running up anywhere close to where they theoretically say you might make it; I much prefer to be well inside the 100% probability #s with a nice cushion, as you seem to be. In our case we only spend about 1.5% of assets in any given year in addition to our SS. And since I have been doing well with our investments for the last couple of years, gaining 40% or more on a diversified portfolio, our assets are multiplying well.
Some might say to "live more and enjoy yourselves", but we do that now. We travel many months each year (we have lots of paid off timeshare points) and we also cruise with Carnival multiple times per year in addition to those vacations. No debts and we give regularly to charities we like, and eat out often, just not at pricey places. Life is good and we, as are many in this website, are blessed.
For me VPW still is way too aggressive, they have us with a 4.7% WR on a 44 year retirement. The key of course is when you look at the downside, no way we would be comfortable with those #s. I get the methodology as their goal is to get close to zero leftover vs. Firecalcs goal is to never run out of money so on average you would be leaving millions leftover to account for the worst case scenarios.
Thats why I'm +4 on the reretire each year concept. Maybe once I get closer to 70 I'll use VPW to blow that dough as we don't have kids.
A little off topic but what are your plans for what remains after you die?
While I am not yet FIREd, if all goes to plan I should spend less than I can (per Firecalc and the like) and will leave the rest to the offspring and charities/schools. If my expenses are 1.5% of my total assets, I hope I have the ability to spend and/or give more while living.
Another question for those of you that use FIREcalc to "re-retire" each year...do you shorten the retirement horizon each year? For instance, if you start with 35 years, in year two do you use 34 years?
The fact you have lived one year longer decreases your life expectancy by less than one year.
Example a male 65 can expect to live 18.09 years; a male 66 can expect to live 17.38 years, a difference of 0.71 years) Social Security Actuarial Life Table
Maybe to decrease your horizon by one year every other year or every three years would be more accurate. Or if you wish to be conservative, don't decrease it at all.