Moemg
Gone but not forgotten
I was wondering how many are sticking with the 4% withdrawal even while the market drops . I have a lot of extra padding in my budget so I'm dropping back to under 3% until I see some positive signs .
Keep in mind that this model survived the Great Depression and the high inflation bad market of the 1970s. We tend to have short memories about things like this that make us think these are the worst and the scariest times ever.Time for a gut check for those counting on the "4% of begining balance + inflation forever" withdrawal model. If, today, you aren't comfortable withdrawing some pre-determined amount regardless of market conditions, maybe you should switch withdrawal models and see what FIRECALC gives as a result. Imagine we were having 10% inflation and your portfolio were really down 5%, would you REALLY just automatically withdraw the pre-set amount from the previous year (representing 4% of the start value with all the inflation updates) plus 10% extra to account for inflation?
That's how I handle getting more conservative when my portfolio shrinks. But I don't have to worry about it until next January and who knows what things might look like then.If you are using the "4% of year end balance" rule, your withdrawals reduce automatically when your portfolio declines. That's one of the nice features of that model--it explicitly accounts for the behavior most of us actually exhibit when things get rough.
I was doing less than 4% even before the drop-----
Great point. It goes to show that the best plans on paper are only good as the emotional resolve to follow them.What I find really funny is that for years anyone who suggested on these forums that valuation of stocks mattered in choosing a withdrawal rate was stoned.
Now, it seems like some are indeed closet believers in valuation- although they seem to have applied the principle backwards. After all, valuations are better today than they were when the market was >20% higher, aren't they?
If you faithfully recalculate your 4% each time the market declines and adjust your spending accordingly, your chances of running out of money before you run out of you are virtually nil...Thanks everybody , It's nice to read seasoned retirees take on this . I may do some remodeling so that will bring me up to 4% . I did recaclculate my 4% after this drop and that's the number I'm using not the Jan.1 4%.
I think everyone should stick to their 4% withdrawal plans and send the excess to Bill Bengen's retirement fund.I was wondering how many are sticking with the 4% withdrawal even while the market drops . I have a lot of extra padding in my budget so I'm dropping back to under 3% until I see some positive signs .
During the last trip we got awful tired of hearing "All y'all's from Hawaya, and yer vacationin' hee-yur?"
If you are not liquidating stocks, it doesn't matter whether the market is up or down.
Ha
During the last trip we got awful tired of hearing "All y'all's from Hawaya, and yer vacationin' hee-yur?"
my brother & sil are a little upset with me that i'm not on vacation with them right now. but i just can't justify to myself spending any more money than need be when times don't look so good. to make this even more absurd, they were paying for everyone; it wouldn't have cost me a dime.
LG4NB, you are holding the reins too tight if you're uncomfortable going on a free family outing.