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09-17-2005, 06:16 AM
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#1
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gone traveling
Join Date: Sep 2003
Location: DFW
Posts: 7,586
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Benchmarking RE Metrics
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.*
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Re: Benchmarking RE Metrics
09-17-2005, 07:22 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,022
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Re: Benchmarking RE Metrics
Quote:
Originally Posted by DFW_M5
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?
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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 ).
__________________
Numbers is hard
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Re: Benchmarking RE Metrics
09-17-2005, 09:37 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Posts: 2,603
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Re: Benchmarking RE Metrics
Quote:
what was your metric in terms of annual need X __ that made you comfortable in pulling the trigger?
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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%.
__________________
FIRE'd since 2005
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Re: Benchmarking RE Metrics
09-17-2005, 11:18 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,723
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Re: Benchmarking RE Metrics
Ours was not based on any multiplier, but we like about $65K per year do 25 x is about right.
SWR
__________________
"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
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Re: Benchmarking RE Metrics
09-17-2005, 11:25 AM
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#5
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Recycles dryer sheets
Join Date: Oct 2004
Posts: 214
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Re: Benchmarking RE Metrics
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.
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