Do you have a zero withdrawal rate?

[MrBig1]

LBYM. Retired against my will. SS, VA. What you get is what you use. Make it work, enjoy life. Beats going 2 WRK. Every day is Saturday. Adjusted from 6 figure income. Still smiling. No need to worry.

[Murph]

So far, I am at a net negative withdrawal rate, even though I'm taking bout $6k/mo.

[Murph]

Quote:

Originally Posted by MrBig1 LBYM. Retired against my will. SS, VA. What you get is what you use. Make it work, enjoy life. Beats going 2 WRK. Every day is Saturday. Adjusted from 6 figure income. Still smiling. No need to worry.

That's what I tell everyone: Every day is Saturday!

[teetee]

I thought one of the FIRE criteria is to have zero or negative withdraw rate against your nest egg.



It would be more clear if your question applies to after FIRE or before FIRE..



I am still working. This year my projected "withdrawl" will be 25% of my investment return, 6% of my net worth gain, or 1% of my net worth.

[imnontrad]

My income from my 30% military pension plus some occasional dividends is ~$1,000/month more than my expenses.
The investments (Roth, Traditional plus traditional portfolio) just keep going up. However I'm thinking of taking some out for a home interior updating (hasn't been done in this place since it was built in 1982).

[teetee]

Quote:

Originally Posted by Murph So far, I am at a net negative withdrawal rate, even though I'm taking bout $6k/mo.

Does it mean that you have at least $1M net worth? Assuming 8% YTD growth (1M x 0.08 x 3/4 = 60k / 9 = 6.67k /mo). Much lower if 19% YTD return rate from SP500 is used.

[Smoeller]

We have done Ok and also lived within our means. Retired at 62.....5 years ago

We raised and put three wonderful kids through college and always planned forsome quality time In our latter years

My spouse has never really had a career but always contributed to achieving our retirement goals

When we had saved enough to live off SS and the interest on our savings we pulled the plug. We have a six figure income and no debt and two homes

We do not invest (gamble) in stocks and will have no problem living out our years comfortably. When we are gone the kids should have a nice bump to their plans for their and grandkids future

Life has had its challenges but we have enjoyed many more good times than bad

Plan well.....execute the plan.....review and repeat

[Beachcomber]

OP - for those who set up income streams and then become debt free, that should not be uncommon.

Might be a good problem to have.

[Sirka]

Quote:

Originally Posted by Souschef Our income from SS and pensions covers all our regular expenses.

Same Here, once we started SS we did not have to spend from Portfolio - except for one time expenses. And this where it gets tricky. Let's say you need to replace a car; want a new RV and buy vacation property. Would that count as "withdrawal"? You bet.
So I gave up on calculating the WR rate. Watch the spending, steady as she goes.

[steveark]

I'm 64, retired at 60 with several million. Haven't spent any of the principle or growth because I earn $100k consulting one day a week and that's all we need to live on. Just working for fun and to stay challenged and relevant.

[steveark]

Oh, and I don't plan on drawing SS until 70.

[2177V]

Quote:

Originally Posted by Floridatennisplayer Curious who else has a zero withdrawal rate. Income that meets or exceeds expenses.

I currently have a federal pension based on 34 years as a government engineer at 2% per year. I retired at 55 and then went to work with the county for 10 years at 2.75% per year. Adding my social security means my retirement income exceeds my engineer's salary while I was working.

I also have a large sum of money in my IRA which is not needed for my retirement income and I consider my IRA as a"disposable" asset. I withdraw from my IRA for vacations, buying properties, and helping family members who has a financial need. I have to pay taxes on my withdrawal so I used TurboTax on different withdrawal situations and I found that a 6% yearly withdrawal is ideal in my situation. I only exceed 6% withdrawal if I need to buy property.

My vanguard account noted that my performance is about 10% per year since I am an active investor who focuses on various sector investments. My wife is 20 years younger than me and she will probably inherit my IRA so my IRA is a life insurance policy for her since she does not have a pension. Commercial life insurance are very expensive after you get older. My wife does not know how to become an active trader so the IRA will likely be invested in a passive index fund.

[VungTau]

Quote:

Originally Posted by vipertom1970 age 50, third week into retirement and have no intention to withdraw from brokerage, Roth, TIRA or roll over IRA accounts.

Congrats! 3 weeks in, wonderful!

[Sanbenito1]

I’m taking nothing out of my stocks or IRA savings. Retired at 55, house paid off at age 60. Rent out my grandma’s old house, and have a small Navy pension (about $25k/yr). I keep an emergency/car/roof fund of about $50K in CDs and money markets. If it ever gets too low I may skim something off my stocks to replenish it, but that would be a negligible draw.

[gooddog]

Zero withdraw rate here, and DRIP for all divs. Will never touch any of it. There will be some lucky nieces and nephews....

[Old Microbiologist]

I think we fit into your idea. Our combined pensions are twice as much than we actually need. The entire portfolio of stocks, IRA's, etc. haven't been touched for the past 10 years except we are taking minimum distributions as required by law and rolling those over to our brokerage account which continues to grow. We have yet to touch that as we generally accumulate around $40k a year in cash which is used as needed for major items and splurges. We have changed our lifestyle to start doing a lot more travel as we have no interest in leaving anything for our families. Her side is already way richer than us and my side don't need it our it will ruin them to get too much. So, we overestimated our retirement needs badly which is a good thing in the long run.

[RobLJ]

I'm happy for the OP and his set, if I understand the question correctly; I realize there are pockets where pensions paying everything is still a thing.

I'm a relatively young Boomer and DW is right at the transition from Boomerism, so the whole meme of only withdrawing from pensions and SS is.......quaint, if not a bit fantastical.

We had 401ks and 403bs as our "options", so withdrawing from dividends and or gains was the only option, other than savings. Along this perspective, about 1/2 of our withdrawals is dividends, and about half is capital gains or gains.

I suppose to withdraw only from pensions/SS is a grand strategy if the goal is to bequeath a big nut to one's heirs, assuming one has something outside of this. But my assumption was that the 401k/403 and rollovers had to fund most of the retirement before and after SS. But I'm not casting judgement, just pointing out that the segment of those able to do what the OP suggests are 1) extremely rare and 2) older than me and DW who saved without pensions.

I don't begrudge pensions to anyone, however. Power to you; it just wasn't an option to us, so I never even considered it. It would have been foolish to do so. (DW will earn a 2600/year pension in about 7 years, though, so I guess I'm exaggerating).

Actually, the whole meme is evidence of how much retirement planning turned on its head when pensions were killed for..... I guess shareholder returns. I'm glad I didn't plan on a pension, though. And I pity those who did plan on a pension and got screwed, but those probably aren't the ones in Florida talking to OP. We're doing fine, by the way, without pensions (other than the pittance mentioned.)

[RobLJ]

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.

If to leave a huge bequest, bully for you. If to dive in a bathtub of gold like Scrooge McDuck, that's OK also.


I think we will have a large excess, after 4% withdrawals from the nut, but my plan is to tap the excess for the grandkids' college as we get older and SS kicks in; and, after that, to the dear sons & family while we are still alive, and then to fund higher education scholarships.

That's just me, though. Y'all can do with your extra beyond your zero withdrawals whatever you think is apt. I never expected to have excess wealth, so it's more of a conundrum on what I should do with what was given me.

By given, I mean given. I suppose I "earned" it, but it doesn't really seem that way. The question troubles me, although I don't mean to say it should trouble you, necessarily.

[Old Microbiologist]

Rob, I get your issues. However, the largest employer in the US is the Federal Government which used to have the best retirement in the world with the CSRS (Civil Servant Retirement System) where you could earn up to 90% of your salary if you hung in there long enough. CSRS employees did not participate in Social Security. That was replaced with FERS (Federal Employee Retirement System) in 1987 which is far less lucrative as it is a mix of the Federal IRA, Social Security and pension plan. There are also a great number of military retirees such as myself who are receiving both military pensions and Social Security. Congress added the military to the SS program as they needed more contributions figuring they would shaft us later which thankfully hasn't happened...yet. I also get a paltry amount from FERS (1% at 10 years) as I moved directly over to the civil service after my forced retirement from the Army. I stayed at my same laboratory in my same position but instead of in uniform was a term (5 year) civil servant which I renewed once and then bagged it.

My point is that it is not all that rare but perhaps those from Federal and Military programs don't do any FIRE planning at all they just retire and usually early like myself.

[RobLJ]

Yea, my Okie grandad worked for the Postal Service after getting hired after the war (WWII), so I understand completely (well, not completely of course). He even built a cabin in Colorado, although that was because he was a carpenter and he did it on about 25k. (I remember him framing it when I went up with him and Grandma when I was 6, with a trailer with 2x4s from condemned houses behind his pickup when we driving up there.) He saved and had a good pension, although I wouldn't consider it much; as a Depression adult, he was extremely LBYM.

I'm not criticizing pensions at all, no way no how.
Just pointing out the question is not much of a reality to the below 55 set, although it can be to a few.


Actually the point was more philosophical (and self-directed) in that, if you aren't spending your means (i.e. 0 withdrawal), what are you going to do with that money when you croak? I obviously haven't solved the question, but I don't know how much I will have left over since I'm still relatively young. I suspect we will have to keep changing the will.