Do you have a zero withdrawal rate?

[street]

^ and one of those exception is loving your job or the love of a business that you own. You may have won but enjoying what you are doing, is more important.

 

[audreyh1]

Do I qualify? Zero wd but the job is full-time

If you are still contributing to your retirement funds then you have a negative withdrawal rate!

 

[RobbieB]

I would sure hope so while you are still on the job.

 

[jollystomper]

Again, for those a generation earlier where pensions is the whole thing (or Federal employees or teachers without much alternatives), this should be the norm.
If you have huge 401ks plus pensions that pay everything, what is your additional money intended for? This sounds I suppose like an attack, but it's a philosophical question that plagues me.

That is a very good question. I cannot speak for others, but for me it can be summed up in the phrase "self-insurance".

First, though I have pension, will receive the maximum SS, and have savings/investments, my planning involvement looking at "if I lose any one of those streams, can I still afford to retire... or even live?".

My Megacorp is in good shape, but we have seen lots of Megacorps in good shape goo bad quickly, and with resulting impact on pension obligations. And though it is insured by the government, the current government financial situation is not something I want to rely upon heavily.

Along those lines, all the talk of SS running out of money, and the current legislation that will cut benefits if nothing is done, does not have me feeling all rosy about this income stream either.

While I am benefiting from the market, part of me does not trust the overall financial outlook. All the interest rate shenanigans, government debt levels, world financial picture, and the next "bubble" - whatever it is - has me wondering if all of this can be sustained. How would people feel and react to a 50% drop in the DOW/S&P 500/NASDAQ indices. We already see how just words and rumors can cause market gyrations, what happens when the next financial crisis hits?

So... I prefer to be an optimist, but I also try to prepare as much as possible. While any "excess stash" I am happy to leave to my kids, I also want to minimize the situation of having to be dependent on anyone else. So if that makes me error on the side of having "too much"... so be it.

 

[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.

 

[audreyh1]

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]

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]

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]

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]

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]

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.[emoji16]. Though, most likely will use next year's projected excess for some larger home improvemers.

 

[Spanky]

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]

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]

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]

That was me

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]

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.