Benchmarking RE Metrics

[eytonxav]

This question is posed to those that have retired early without a pension. I have heard that as a rule of thumb, you should have a portfolio that is 25X your anticipated annual $ needs (assume before tax $). While this may be age dependent, for those that have RE'd without a pension that are living on lump sums,  what was your metric in terms of annual need X __ that made you comfortable in pulling the trigger?   

In my case, I am looking at $70-75K annual need, which will most likely keep me working for another 4 years, unless the market is overly kind to me, before I can RE at age 60.  For me, cutting expenses is not an option, since I still have one child in HS and another is a college sophmore. 

 

[REWahoo]

While this may be age dependent, for those that have RE'd without a pension that are living on lump sums, what was your metric in terms of annual need X __ that made you comfortable in pulling the trigger?

In my case (age 58) it was 25x plus an additional amount to bridge the gap between 58 and the SS we will begin drawing at age 62 (I hope ).

 

[tryan]

what was your metric in terms of annual need X __ that made you comfortable in pulling the trigger?

33X annual spending - or 3% withdrawl. Would be comfortable with 25x (4%) if I was 60+ since SS and a small pension would be a few years off. But having 20+ years before SS and pension $$ arrive, I am using 3%.

 

[ShokWaveRider]

Ours was not based on any multiplier, but we like about $65K per year do 25 x is about right.

SWR

 

[RockMiner]

Assuming full RE at 55, I'm planning a 3.5% SWR plus a buffer for unforseen expenses.  To me, 4% assumes the future will be like the past and that seems um, risky.  I see 3.5 as a good compromise between a somewhat optimistic 4% and ultra-conservative 3%.  Most likely, some entirely unforseen things will come up but I figure we'll just adapt.