Well gosh. If you're going to go there, then nothing is really safe, is it?
Which, of course, it isn't!
Yep, raising the WR from 3.3% to 3.8% will be just enough to cover increased expenses due to 8% inflation.
+1. If 0.2% is the difference between success and failure, now might be a good time to rethink those retirement plans.
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For some retirement was involuntary.
If you've been following my 7000+ posts you know that I'm an idiot. A lucky one maybe, but still an idiot!
Yep, raising the WR from 3.3% to 3.8% will be just enough to cover increased expenses due to 8% inflation.
With TIPS now paying something like 1.4% real, a 30 year retirement on just 100% TIPS gives you 4% SWR at 100% success.
Sorry, is that for your situation or a calculation you could share with us? When I do the math of 3.3 to 3.8 I get about 15% absolute difference between the two (math is not my strong suite, so YMMV.)
14% increase to cover 8% inflation?! You buying more tool toys than me?
Sorry, is that for your situation or a calculation you could share with us? When I do the math of 3.3 to 3.8 I get about 15% absolute difference between the two (math is not my strong suite, so YMMV.)
Again I ask, why not TIPS in this era of 8% inflation then?
Again I ask, why not TIPS in this era of 8% inflation then?
As of today, FIRECalc has not been updated to include any data from this calendar year (2022). Will be interesting to see how much my SWR drops once 2022 data is factored in. It just gave me a 3.6% SWR using my standard "most conservative" inputs, e.g., no inheritance, no reduced spending from age 56, substantial SS haircut, no supplemental income from DW's job or my options trading, etc.
It depends on where this “conventional wisdom” is coming from. I’m pretty skeptical about the folks who keep coming up with different rates.So, an academic question:
Let's say that you figure out that 4% is the right WD rate for you. Good or bad economy, that's what you WD after accounting for inflation.
After a decade, the new "conventional wisdom" is that 3.6% is what you should be at.
Do you keep your 4% WD or should you reconsider/recalculate?
IOW, does the new number apply only to the newest retirees?
Again, an academic question as I'd expect most people do a recalculation every year or so. And I doubt anyone holds themselves to an unwavering 4.00000% anyway.
I scan through this thread, and it looks like people miss something.
That is, the S&P is now 0.825x its value back one year ago.
3.8% of 82.5c is 3.14c, or the same as 3.14% of the value last year.
And add 6% inflation YTD, and you are now "enjoying" 2.96c compared to 4c of last year.
PS. The above numbers are for 100% stock AA. If you have some bonds, the numbers don't change much because bonds have been down just as badly as stocks.
Hmmmm. I guess I'm doing it wrong. My Port is up over the past year. Just barely, but up...