haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Maybe 2% would be more appropriate? So after your assets are cut in half, you still can take a 4% SWR?
You don't know his wife!
Maybe 2% would be more appropriate? So after your assets are cut in half, you still can take a 4% SWR?
You don't know his wife!
Are you suggesting that his assets are not the thing that will get cut in half?
6% is wussy. The 4% retiree in January 2000 (with the FIRECalc default portfolio) was drawing over 6% last year. It's about 9.5% now (with an S&P of 900). This doesn't include any money lost in bond defaults.
6% is wussy. The 4% retiree in January 2000 (with the FIRECalc default portfolio) was drawing over 6% last year. It's about 9.5% now (with an S&P of 900). This doesn't include any money lost in bond defaults.
it seems nothing more than a crap shoot to take long term averages and apply them to short term lives. it all sort of depends when you hop on the ride.
How would that compare to someone at the end of 1974 who started taking 4% in 1966, particularly in real dollars?6% is wussy. The 4% retiree in January 2000 (with the FIRECalc default portfolio) was drawing over 6% last year. It's about 9.5% now (with an S&P of 900). This doesn't include any money lost in bond defaults.
Many aspiring to a 2% SWR are doing it for ERs that exceed the Trinity study's 30-year period. If you're trying to achieve success over five or six decades then 2% might actually be a better SWR. Raddr's research indicates that 4% is exceedingly optimistic past 30 years.
How would that compare to someone at the end of 1974 who started taking 4% in 1966, particularly in real dollars?
How would that compare to someone at the end of 1974 who started taking 4% in 1966, particularly in real dollars?
So your simulation shows that one shouldn't withdraw more than 6%, or 6% less 10% (no more than 5.9%) when the economy started downward?
-- Rita
What I was trying to show was that cutting spending can make a big difference. FIRECalc assumes people blindly increase spending each year with inflation regardless of what is happening.
My in-laws just about did. Wait a minute. You wrote "in their right mind."Who in the right mind would draw his/her assets down to 0?
Who in the right mind would draw his/her assets down to 0?
A year ago, FIREcalc was showing me 100% success at age 52 (assuming no changes in my j*b situation between now and then). Today that 100% success level is back up to 57 because of the whacking my portfolio has taken. If I put in a part-time j*b at $1,000 a month until age 62 I can get that back down to 54. And if my wife can ever find a j*b (in this crappy economy) at $20,000/yr, it's back down to 52.I always specify in Firecalc that I don't want my portfolio ever to be any smaller than $200K. I am thinking of doubling that amount in future runs. I also specify 100% probability of success. These specifications just provide a peace of mind factor, for me.
A year ago, FIREcalc was showing me 100% success at age 52 (assuming no changes in my j*b situation between now and then). Today that 100% success level is back up to 57 because of the whacking my portfolio has taken. If I put in a part-time j*b at $1,000 a month until age 62 I can get that back down to 54. And if my wife can ever find a j*b (in this crappy economy) at $20,000/yr, it's back down to 52.
Think I'm going to invest in a sandwich board.
Sigh.
FIRECalc assumes people blindly increase spending each year with inflation regardless of what is happening. That is not a reasonable assumption.
We already live rather simply and in reality, if we cut out all the nonessential "stuff" we enjoy, other than making life feel like it sucks a lot more, the additional amount we could save is a puny pittance compared to another (or longer-lasting) income stream in terms of the "safe" retirement date. I saw that with no other changes in income and employment, saving another $3,000 a year would move the needle one year at most -- if that. It would only change the amount we're currently saving each year by about 10%.Let's list some options:
(1) wife somehow manages to land a j*b (something you can't control)
(2) invest in a sandwich board and hope for a miracle (something you can't control)
(3) LBYM a little more (something you can control!)
(4) work an extra 5 years.
They all sound pretty dismal, though one sounds more appealing to me than the others.
We already live rather simply and in reality, if we cut out all the nonessential "stuff" we enjoy, other than making life feel like it sucks a lot more, the additional amount we could save is a puny pittance compared to another (or longer-lasting) income stream in terms of the "safe" retirement date. I saw that with no other changes in income and employment, saving another $3,000 a year would move the needle one year at most -- if that. It would only change the amount we're currently saving each year by about 10%.
Sure, it's something, but I don't know that moving up the exit date one year is worth living in near-austerity until then.
I always specify in Firecalc that I don't want my portfolio ever to be any smaller than $200K. I am thinking of doubling that amount in future runs. I also specify 100% probability of success. These specifications just provide a peace of mind factor, for me.
Great point! Inflation is a complicated beastie. Sure the headline number increases by 3% - but what about your personal inflation rate? I don't enjoy travel much (too much of that in my job), and eat a vegan diet of vegs, fruits, beans and grains. The price of my foods is very stable, I didn't notice anything like the meat and milk eaters did when energy speculation drove up their costs last year.
If you live a low key lifestyle inflation doesn't have to be very troubling.
Be honest now. Judging from your feelings and posts during the current or recent stress, how peaceful would your mind be if your portfolio declined to $200,000- or to $400,000 for that matter?
Ha
A year ago, FIREcalc was showing me 100% success at age 52 (assuming no changes in my j*b situation between now and then). Today that 100% success level is back up to 57 because of the whacking my portfolio has taken. If I put in a part-time j*b at $1,000 a month until age 62 I can get that back down to 54. And if my wife can ever find a j*b (in this crappy economy) at $20,000/yr, it's back down to 52.
Think I'm going to invest in a sandwich board.
Sigh.