Mental Gymnastics to Make Sure You are Spending Enough

[Dtail]

I thought I was super analytical with withdrawals and budgeting, but you are ahead of me. IIRC, you have at least 7.5m with a planned fat fire retirement, so anything 3%WR and under will work. Don't overthink it.

 

[TheWizard]

My pension/annuities + age 70 SS more than covers my expenses most months.
So I invest any excess over $10k in checking into stock funds in my taxable account.

I can see where a new retiree might take a year or two to get a good grip on their retirement spending pattern, especially if most of their income comes from portfolio withdrawals...

 

[dawdmorgan]

If you want to get even more analytical, check this article out. I think Guyton's work (and others) has taken the 4% rule to the next level. His SWR is a little aggressive for me, but I think the approach is brilliant - and helps me sleep well at night knowing that my WR is comparatively conservative. I target 4% but as others have stated, sometime over, sometimes under...

There is a lot more out there from Guyton and others on withdrawal "decision rules" if you want to overthink it.

https://cornerstonewealthadvisors.com/wp-content/uploads/2014/09/08-06_WebsiteArticle.pdf

 

[OverThinkMuch]

Initial plan... Dec 31, review portfolio returns for year. If under 5%, takeout 2.5%, if greater, takeout 2.5% + something else This goes into cash to potentially spend for the year. If I spend it all, great. If not, I push it forward into next year's bucket. Rinse/repeat.

My initial plan for retirement was similar: 2.5% adjusted by market performance: -0.5% after a bad year, +0.5% for a good year. More important than the initial plan is revisiting it in a few years, or when something changes. If you move somewhere much cheaper, you might not need as much.

Another consideration: some of your 40% bonds could be in cash. Even 5% cash can provide a nice cushion for downturns, without hurting bond performance much. My approach was 2/3rd equities and 1/3rd bonds.