What was your WR YTD

[street]

It was a surprise to me that I had a negative WR percentage this year. I reworked the number a few times and came up with the same percentage.

YTD, we had -.40% WR. In the 7 years of ER, I had one other year as a negative. We had some BTD events this year so a surprise.

 

[perez99]

Either 3.6% or 3.8%, depending if a payment goes thru in the next 24 hours.

 

[ShokWaveRider]

I am confused about folks definitions of WR.

Is it from Qualified or Non-Qualified Accounts?

One has to live on something, if one gets say $100k in dividends, interest, Capital gains from all sources and SS, then this gets added to one's stash. Then if one spends $100k for a given year, and one's total stash after the $100k addition is $2m, then one's WR would be 5% in my books. Even if one spends less than $100k, say $50k, the WR would still be 2.5%.

Am I doing the math wrong? If this is doing it correctly, then Street is living on thin air. Of course, I am joking, so please help me understand. If one does not count SS, and one is living on SS, then I get it.

If not including SS in the WR is the case, then we were less than 0% also as we spent less than out total SS in 2023 and banked all our Interest and Dividends. This should not be the same for 2024 as I am feeling we need to spend some money before it is too late.

 

[perez99]

To my understanding you can have a negative WR if your non-portfolio income exceeds your expenses. Typically this will be income like pension and social security.

 

[street]

This is how I figure mine could be wrong but it is how I know what I spent for the year. We only Withdraw money from one account from a bank, no other accounts/investments have Withdrawal's from them through the year. So, January there is a start number and in December there is a number from that same account and only that account. No other investments or accounts have monies taken out of for the year.

We take SS and a little Interest goes into that account each year. So, not sure if it is right or wrong way, but I know a number each year what we spent to the penny. No pensions to use in my case, no jobs to add money either into that account. SS and a little Interest money is added, and we spend from that account only.

One pot and in the end is what is left.

 

[ShokWaveRider]

To my understanding you can have a negative WR if your non-portfolio income exceeds your expenses. Typically this will be income like pension and social security.

Is this before or after taxes? Although, I am not sure this is a valid question as if one has only say ... $10k of portfolio income and pays minimal taxes, it may be moot. Although if one has $100k of taxable portfolio income, then it may be relevant.

 

[Andre1969]

I am confused about folks definitions of WR.

Am I doing the math wrong? If this is doing it correctly, then Street is living on thin air. Of course, I am joking, so please help me understand. If one does not count SS, and one is living on SS, then I get it.

If not including SS in the WR is the case, then we were less than 0% also as we spent less than out total SS in 2023 and banked all our Interest and Dividends. This should not be the same for 2024 as I am feeling we need to spend some money before it is too late.

To me, a negative WR would simply mean that, somehow, you managed to add more to your investments than you pulled out to spend. I could easily see this happening, if you're getting a decent pension, plus perhaps some SS.

My Mom and stepdad had what I'd consider a negative WD rate. With what they got in pensions/SS, it more than covered their expenses, so any excess from the pensions got added to investments/savings. Mom had to start withdrawing from her gov't retirement account at 70.5, as she just missed the threshold for 72. Since she had no need to use the money, she'd just put it in the bank, in a savings account or something else that was low-bearing.

When Mom died, my stepdad got a survivor benefit from Mom's pension. It's reduced, compared to what Mom got paid, but still well above his expenses. So, unless he starts really blowing money on frivolous stuff, or runs into some seriously expensive health issues, I expect him to have a negative WD rate, until the day he dies.

 

[ShokWaveRider]

This is how I figure mine could be wrong but it is how I know what I spent for the year. We only WR money from one account from a bank, no other accounts/investments have WR from the through the year. So, January there is a start number and in December there is a number from that same and only that account. No other investments or accounts have monies taken out of for the year.

We take SS and a little IR goes into that account each year. So, not sure if it is right or wrong way, but I know a number each year what we spent to the penny. No pensions to use in my case, no jobs to add money either into that account. SS and a little IR money is added, and we spend from that account only.

One pot and in the end is what is left.

Then we are way negative for 2023, I have not done the math, and probably will not do. We have only spent from our SS in 2023. It "just" covered everything, and we had $15k in unexpected home maintenance. All IR was reinvested and 50% of that is taxable. If you call Taxes part of the WR, then we are not net Zero.

 

[RetireAge50]

Our portfolio withdrawals this year were 3%, the highest level ever for us.

 

[disneysteve]

Your 2023 WR is the percentage of your portfolio as of 12/31/22 that you spent in 2023. That can’t be negative.

Ours is about 1.87% but I still work some.

We are ending 2023 with about 300K more than we started with thanks to market performance despite pulling out about 57K along the way.

 

[athena53]

3.4% of the investment balance at 1/1/2022. It's been pretty stable since I retired 9 years ago.

 

[racy]

(Interest & dividends we spend + pre-tax IRA withdrawals)/portfolio balance = Withdrawal rate. For us it's 1.3%.
Taking SS late helped a lot, I think.

 

[audreyh1]

To my understanding you can have a negative WR if your non-portfolio income exceeds your expenses. Typically this will be income like pension and social security.

Right.

disneysteve[/U];3032050]Your 2023 WR is the percentage of your portfolio as of 12/31/22 that you spent in 2023. That can’t be negative.

Ours is about 1.87% but I still work some.

We are ending 2023 with about 300K more than we started with thanks to market performance despite pulling out about 57K along the way.

Yes it can if you have other income streams and don’t spend it all but add the remainder to your portfolio.

 

[audreyh1]

3% of the retirement fund balance on 12/31/22. I always take my annual withdrawal at the beginning of the year.

 

[ShokWaveRider]

3% of the retirement fund balance on 12/31/22. I always take my annual withdrawal at the beginning of the year.

In theory one should take it at the end of the year so as to make the most of compounding. But I guess taking it on 1/1/New_Year is pretty much the same although then taxes are due at the end of New Year.

 

[Ronstar]

0.5%

 

[audreyh1]

In theory one should take it at the end of the year so as to make the most of compounding. But I guess taking it on 1/1/New_Year is pretty much the same although then taxes are due at the end of New Year.

No, in theory one should take it at the beginning of the year, because that’s how models like FIREcalc operate.

Taxes are simply an expense paid during any given year. It doesn’t matter which year they pertain to, just when you pay.

As it happens, by the end of the year I have a pretty good estimate of income taxes I will have to pay during the following year including estimated taxes. The first thing I do is set aside funds to cover these taxes. The remainder of the withdrawal is available for regular spending.

 

[disneysteve]

Yes it can if you have other income streams and don’t spend it all but add the remainder to your portfolio.

3% of the retirement fund balance on 12/31/22. I always take my annual withdrawal at the beginning of the year.

Your second quote is the way that WR is normally defined, and the same way that I define it. Your first quote is something entirely different. I'm really surprised to read some of the posts in this thread where people are defining WR very differently than the commonly accepted way. I now realize that any discussions of WR on this site are worthless without knowing how the poster defines the term.

 

[NewEnglander]

exactly 4% this year but this will decrease to about 2% once we start SS, unless we increase our spending.

 

[wmc1000]

We haven't touched any of our retirement balances since retiring at the end of 2016 and will only have WD once RMD's start in a few years. We did dip into our non-retirement funds this year for $71K in extra planned expenses. Our overall WD was 3.5%

 

[audreyh1]

Your second quote is the way that WR is normally defined, and the same way that I define it. Your first quote is something entirely different. I'm really surprised to read some of the posts in this thread where people are defining WR very differently than the commonly accepted way. I now realize that any discussions of WR on this site are worthless without knowing how the poster defines the term.

It’s typical on this forum.

Many folks here have more than sufficient means. They have all their accounts treated as one, take whatever they need to spend whenever they need it throughout the year, and at the end they look at what they spent and divide it into what they have left over. It’s really just a reality check - if it’s not too high they know they are OK. I think of it as the lazy withdrawal method because you just spend and do a quick check at the end of the year. But it does not correspond to any of the safe withdrawal rate models.

In street’s case I assume he took into account what he had left over (unspent) from additional income and didn’t touch his investments. I could be wrong.

 

[The Cosmic Avenger]

I would count outside deposits against my WR, like SS and pensions and the like, but not interest, dividends, or portfolio gains. Otherwise you'd have to count losses as "withdrawals", too.

 

[Lewis Clark]

Our withdrawal rate based on actual spending cash flow in 2023 (compared to our financial assets on Jan 1, 2023) was 2.0 %. This includes taxes since taxes are part of what we spend.

Our withdrawal rate based on total spending (including amounts we escrow for lumpy expenses) was 2.4 %.

Edit: This spending refers to only funds withdrawn from our portfolio. It does not reflect the spending paid for by my pension.

 

[Ronstar]

Our withdrawal rate based on actual spending cash flow in 2023 (compared to our financial assets on Jan 1, 2023) was 2.0 %. This includes taxes since taxes are part of what we spend.

Our withdrawal rate based on total spending (including amounts we escrow for lumpy expenses) was 2.4 %.

I calculate differently - I don't base WR on total spending, because most of our spending is not from withdrawals from our portfolio.

Most of our spending comes from SS, DW's pension and an annuity. I don't include the PV of the annuity, SS, or pension in our portfolio.

I do take some "withdrawals" from our portfolio (so far only cash), and only these withdrawals are used in WR calculations.

 

[Midpack]

Our largest annual WR by far at 3.2%, but that's meaningless - because I bought a car, did another large Roth conversion in 2023 (additional taxes), and haven't started SS yet...