Do you have a zero withdrawal rate?

[audreyh1]

Quote:

Originally Posted by DrRoy I have a zero WR if you mean not touching principle. WR after small pension this year was 1.6%. I am not sure because I took all our spending from the taxable account and I do not track "income" from the sheltered accounts, only total return. Looking to up the WR to 2.4% next year so probably will touch some principle.

Zero withdrawal rate does not mean not touching “principal”, it means to taking anything from investments at all. If you take any investment income that counts as a withdrawal.

[Vacation4us]

^But what happen to money is fungible

[teetee]

I have a full time job and long way from retiring but if I spent no more than $8k this year while my YTD investment return after capital tax is ~$20k, does that count?



Or does it have to be risk-free returns like CDs and passive income like rentals? I imagine some people's withdraw rate looks very different if they compare it in 2008 and 2019.

[teejayevans]

Quote:

Originally Posted by audreyh1 Zero withdrawal rate does not mean not touching “principal”, it means to taking anything from investments at all. If you take any investment income that counts as a withdrawal.

Which means you either have a job or a pension.

[Aiming_4_55]

Quote:

Originally Posted by teejayevans Which means you either have a job or a pension.

How should rental income be viewed? If one lives off the net rent income is that spending the dividends from investments?

I'm still working so its just adding to networth and FI.

[Timeisprecious]

Quote:

Originally Posted by Floridatennisplayer I’m talking Zero from your portfolio. No interest, no dividends. No withdrawals. Just Soc. Sec., pensions, and yes annuity payouts as they are a grey area but are really like a pension that cover your annual expenses.

Well, I'm not yet retired (2.5 months to go) but my projected military pension exceeds my projected expenses. And, I'm only 62 y.o. and don't plan to begin collecting SS until 70. But - this does NOT mean I won't withdraw anything - I have the travel bug!

[audreyh1]

Quote:

Originally Posted by audreyh1 Zero withdrawal rate does not mean not touching “principal”, it means to taking anything from investments at all. If you take any investment income that counts as a withdrawal.

That should be not taking anything from investments.

[audreyh1]

Quote:

Originally Posted by Aiming_4_55 How should rental income be viewed? If one lives off the net rent income is that spending the dividends from investments? I'm still working so its just adding to networth and FI.

As income, like a job, pension and SS. It is a kind a job managing your properties for which you get paid rent, even if it doesn’t take many hours a week.

[Vacation4us]

Once I can get hubby to retire we will have a 0% WR until RMD or our wants exceed his pension.

We won’t have much access though until I am 59.5 currently 7 Yrs from now.

[Henry Lili]

Been living off divies and Interest for almost six years now. Generate an average of 20% more then I spend (projecting 28% surplus this year).. The excess income/capital then generates additional income the next and and future years. Old habits die hard.. Though, most likely will use next year's projected excess for some larger home improvemers.

[Spanky]

Quote:

Curious who else has a zero withdrawal rate. Income that meets or exceeds expenses.

No, we are not that fortunate.

[street]

I forgot about this thread but reading through the posts it really does amaze me of so many with 0 or under 1% WR.

[RobLJ]

Quote:

Originally Posted by street I forgot about this thread but reading through the posts it really does amaze me of so many with 0 or under 1% WR.

I don't understand the point--unless it is to leave a huge legacy for your kids/heirs, which at least makes sense.

Otherwise, it seems silly, almost idiotic.

[RobLJ]

I'd prefer to spend most of it, myself, but that's just me. It's almost like a 0 withdrawal rate is the Red Badge of Courage or something.
I assume some here mistakenly think 0 withdrawal means not touching principal, but that's not what it means. Or maybe they do mean that. WTF?

[seraphim]

We don’t need to touch our investments to live, but do so to travel as we wish. Still plan to leave a significant legacy to our son. The day may come we slow down and go to 0 withdrawal. Why spend money just for the sake of spending it, as long as we’re really not missing out on something we want?

[RobbieB]

Yup, that's it. Don't miss out on the things you want just to save dough that you have plenty of.

[RobLJ]

Quote:

Originally Posted by seraphim We don’t need to touch our investments to live, but do so to travel as we wish. Still plan to leave a significant legacy to our son. The day may come we slow down and go to 0 withdrawal. Why spend money just for the sake of spending it, as long as we’re really not missing out on something we want?

This makes sense. I also understand leaving a legacy for charity, but we sent the DSons to schools; they have good jobs; and they understand they will get only whatever is left. We apparently don't have the margins a lot of folks here do, but power to you and them.

[scrabbler1]

When I was putting together my ER plan back in 2007-2008, one unbreakable condition I made was that there would be no change to my everyday spending habits. If I wanted to splurge on something once in a while, I had enough of a cushion or surplus built into my budget so that I could it without worrying about busting my budget. My thought process was not something like this: "I need to cut back my spending so I could get a 2.5% WR." Instead, it was more like this: "My WR is already at 2.5%, so if I splurge once in a while and it rises to 2.8% or 3% one year, I will be just fine."


And any added, unexpected spending doesn't have to be for something fun or entertaining. For example, in just the last 2 months, I had to replace my air conditioner ($500, it's a big A/C) and I will also need some expensive but vital dental work (no dental insurance) which will cost about $1,100. I have sufficient cushions in my budget around now so I won't even have to sell any holdings to pay the bills when they become due, not that doing that would be harmful.

[steveark]

I'm zero withdrawal. I earn 100% of what we spend with my one day a week side gigs. 8 hours a week times $250 per hour equals $2000 a week or $100k per year. My portfolio does what it does, I don't touch it. I don't need to earn but I can't seem to help it.

[Dtail]

Quote:

Originally Posted by steveark I'm zero withdrawal. I earn 100% of what we spend with my one day a week side gigs. 8 hours a week times $250 per hour equals $2000 a week or $100k per year. My portfolio does what it does, I don't touch it. I don't need to earn but I can't seem to help it.

Of course coz you are not retired.
Here we go again. lol
Seriously, that is good @250 per hour rate.