Actual Withdraw Rates

[GravitySucks]

We have lots of Safe a Withdraw Rate discussions, but for those of us who now have a few years under our belt - what has your actual WR been?

I planned on a 4.5% as my SWR, but so far it's been:

Year 1 - 0.2% due to it being 9 months with separation pay and Unemployment Insurance. The 0.2 came out due to some oddity transferring money from 401k to IRA.

Year 2 - 3.1% due to some left over of the separation pay and a loan to a family member being paid back. ( didn't count that in my investable as I never expect family loans to be repaid.)

Year 3 - 4.3% bit of that loan repayment came that year.

Year 4 (current year) - on track to hit the 4.5% mark, but might bump it to 5% for extra travel.

No pension. SS survivor expected to come online in two years. Full SS in twelve years.
All percentages based on initial investable assets.( not inflation adjusted.)

Mr. Market has been very kind and the existing balance is growing even after withdraws.

 

[FreeBear]

Similar to gravity, we've been at about 4.5% of initial investments for the last 1.5 yrs of ER. No pension or cushy health retiree healthcare.

Plan to pull SWR down to 3.5% when SS starts. Early SS is about 5 years out. Not sure if we'll take SS early, but I doubt we'll wait to 70! Let's see what the market does...

Honestly, I'd prefer to be below 4% now, but we've got to live while we have our health.

 

[MichaelB]

When I retired in '00 our initial withdrawal rate was around 5%, not including college expenses for 2. In the mid-aughts it stabilized around 4% - the kids moving out and us relocating were the two drivers of that reduction. This year it's closer to 3.6%.

 

[RobbieB]

I've been at zero so far.

This year with the solar and the home improvements I hope to hit 2%.

 

[audreyh1]

We do it based on end of year portfolio value each year. We started at 3.3%, then moved up to 3.5% after a while. May drop back to 3.3% as we have been building up quite a cash reserve due to unspent withdrawals.

 

[marko]

For a number of reasons similar to Gravity, my past 10 year withdrawals have been in the 1.5%-2% range but with a SWR of about 4%.

I wonder if anyone 'banks' the difference for later use. For example, if your SWR is 4% and one year you only take 1%, does anyone view that additional 3% as banked so that one year you might withdraw 7% and still be 'safe'?

 

[Danmar]

Just spend divs. Current yield is about 3.95%

 

[Major Tom]

I've been withdrawing the exact same dollar amount since beginning withdrawals 5 years ago, which is about 2.4% of the starting portfolio value, IIRC. That same amount is now about 2% of the current portfolio value, due to market gains.

 

[Another Reader]

I have to take RMD's from an inherited IRA. A bit more than the pre-tax amount of the RMD's is automatically directed at mortgage pay down. I have pensions and rental income as well, and some of that income gets saved, invested, or thrown at mortgages. The portfolio value has been increasing, so while there has been a little draw down on the inherited IRA, overall, more money is going into investments and savings than is coming out.

ETA: Social Security is enhancing the savings, investments, and pay down as of a few months ago.

 

[bingybear]

I'm not even checking what we withdraw.

 

[Hermit]

I retired in July, 2013. Nothing that year. 1.4% in 2014, 1.6% in 2015. I plan to bump that up to 2.2% this year. That puts my income about where it will be when my SS starts in 4 years. In the mean time, I have pension and SS survivor coming in. I really like my Uncle Sam and share 25% of my withdrawals with him.

 

[davismills]

In four years we've withdrawn zero, thanks to a large buildup of cash the last two years of my working life. I also have a pension and my DW has a small SS deposit each month. SS deposits for me start next year. Life is good.

 

[marko]

Just spend divs. Current yield is about 3.95%

My SWR is quite a bit below my dividend income; Firecalc says I'd only have a 60% chance of success if I spent them all each year.

As mathjack continues to lecture, dividends are not the same as interest.

 

[braumeister]

Started out with 2.67%, and it has fluctuated both up and down since then.
Highest was 3.55%, but long term average has been a little below 3% (all based on initial portfolio value).

 

[Alan]

Like Audrey I calculate my % WR based on the total at the end of the previous year. Early next year I'll start drawing another private pension and the year after DW will start drawing SS, so the amount needed from savings will drop. Of course the % withdrawn will also depend on how the portfolio performs.

I also do an annual check using FIRECALC and Fido RIP.

Year 1 0.00% (bonus meant no withdrawals needed)
Year 2 0.86%
Year 3 1.27%
Year 4 3.51%
Year 5 5.40%
Year 6 5.43%
Current year 6.00%

 

[scrabbler1]

My first full year of ER began in 2009 and my SWR from 2009-2011 ranged from 2.4%-2.6%. My expenses rose in those 3 years, mainly due to health insurance increases and income tax increases from unexpected investment income. But my portfolio grew a lot which canceled out the expense increase.


But from 2012-2013 my health insurance premiums dropped because I switched to a cheaper plan, leaving me underinsured for a few years until the ACA began in 2014 and I could buy a broader but affordable plan. My HI premiums again rose in 2014 but my portfolio kept rising so my SWR, which had dropped to 1.8%, remained unchanged for all 3 years.


In 2015, I got sick and spent 12 days in the hospital so my health insurances spiked. Thank goodness for the ACA which capped my costs at the amount of my deductible+copays+coinsurance. My SWR rose back up to 2.5%.


Assuming I don't have a replay of 2015, my SWR should return back to around 2% which is just fine.

 

[REWahoo]

Based on the initial value of our portfolio when we retired:

1 - 4.8%
2 - 9.8%
3 - 7.9%
4 - 6.1%
5 - 5.4%
6 - 4.2%
7 - 3.9%
8 - 3.5%
9 - 3.7%
10 - 4.3%

Note the impact of SS for me in beginning in year 4 and DW beginning in year 6.

 

[Meadbh]

Using as denominator my investable assets at the time of RE:
Year 1: 2.97%
Year 2: 3.34%
Year 3: 2.50%

Using as denominator my investable assets at the beginning of the year:
Year 1: 2.97%
Year 2: 3.06%
Year 3: 2.20%

My goal is to stay <3.5%, for now. No pension here, and CPP won't amount to much.

 

[Cobra9777]

We have pensions and rentals that cover 70% of spend, including tax. The remaining 30% represents 1.7% of current portfolio value. Roughly half the 30% comes from cash dividends from the taxable account. Since retiring 3 years ago, the other half has come from working down our cash reserves, which were way too big when we retired. Once SS kicks in, we expect the withdrawal rate to be near zero, and most RMDs will go into the taxable account, net of Uncle Sam's cut.

 

[golfersailor]

Retired in 2009

Year 1 Zero
2. Zero
3. 4.70 %
4. 3.76
5. 3.45
6. 4.29
7. 2.98
8. 3.75

We still have grown our net worth by 60% because I took SS at 62 and I have a good pension. Life is good!

 

[SteveNU]

Semi Retired in 2013 and fully retired this year. Right now pension covers about 60% of our expenses.

2013 0%
2014 0%
2015 1.8%
2016 7.5% (home renovations)
2017 - 2018 should be in the 6-8% range and then as my SS comes online it should drop down to near zero. The wife's SS follows about 4 years later and will give us even more of a cushion.

Sent from my Nexus 6P using Early Retirement Forum mobile app

 

[Free]

6+ months in and no withdrawals. Hoping to make it one year, but it'll be close with a last kid's tuition bill due in the Fall. One more of those payment left next year. Glad to report there has been no substantial change in lifestyle, and living within reduced retirement income. Plenty of free things to enjoy and doing most of the handyman fixes and improvements myself. Used frequent flyer miles and credits for 4 out of state flights so far (two with DW), but those won't last forever....three of those flights to help mom move to senior living and sell her house, one for a well deserved cruise.

 

[Danmar]

My SWR is quite a bit below my dividend income; Firecalc says I'd only have a 60% chance of success if I spent them all each year.

As mathjack continues to lecture, dividends are not the same as interest.

Yes, I understand your point, but I am confident I will not run out of money. Been retired 10 years and portfolio is way up.

 

[bingybear]

several people noting they are withdrawing very little or 0. Just curious what you are living on.
Is this cash on the side that you don't see as part of your investments?
Is this rental income?
Is this SS or pension? (some noted this)
Is this dividend or interest?
Is this an annuity purchased with your investments/retirement $?

Just curious how 0 is obtained.

 

[RobbieB]

For me, dividends & interest, SS and capitol gains.