Do you have a zero withdrawal rate?

[street]

^ Yes, that is true. Thanks

[NW-Bound]

Quote:

Originally Posted by jimnjana Not taking any withdrawals currently. We have taken funds from DW ira previously. But stopped after I realized we were essentially just moving funds to a taxable investment account. Pensions and rental income cover expenses.

Quicken considers an IRA or 401k withdrawal as just a fund transfer, where you move money from the right pocket to the left pocket, and rightly so. It's not an expense until you actually spend it, and it is certainly not an income like an interest or dividend payment. Same with a Roth conversion.

What I discovered just recently is that it does not classify the tax withholding as a tax expense. That's wrong. It just does not show up anywhere, and is just a phantom loss from my portfolio. I had to make a manual entry to get that properly registered.

Other than that, I just look at the total expenses which Quicken downloads from my checking account, and subtract out my wife SS, the only "income" we have. That's my WR, and that money has to be covered by transfers from other accounts, whether taxable or before-tax, else my checks will bounce.

[Floridatennisplayer]

Sorry, Ivansfan, not sure why this seemed to anger you.

I only asked, because today at lunch with some newly retired buddies they asked what kind of withdrawal rates each other was dealing with. I asked what they meant. They said withdrawing from your portfolio to cover your expenses. And I see people here talking about their withdrawal rates and quoting financial articles talking about average withdraw rates.

I told them right now we aren’t needing to withdraw from our portfolio or anything as our income covers our expenses.

Thus, I was curious about this as I am newly retired. Nothing I planned for, it just has ended up this way. So, I was curious about this.

[Ronstar]

Quote:

Originally Posted by Floridatennisplayer You have been withdrawing from your portfolio. I’m talking about zero portfolio withdraws. Where your income (SS, pensions, part time job, annuity) covers your annual expenses.

I’m sure that there are several folks here that have 0% or negative withdrawal rates given your criteria. My last few working years were spent working just enough part time hours to meet my expenses.

[Mdlerth]

Since I'm still drawing a paycheck, I don't have to make any PF withdrawals. But since that also means I'm still contributing to a 401k, technically my WR rate isn't zero, it's negative.

However, assuming lots of assumptions such as I will live long enough to start SS at age 70, that my patience isn't punished by a severe haircut, that megacorp's pension doesn't go bust, that inflation remains tame, that we don't take up yacht racing, etc... then at some future point we should have sufficient passive income to get along with zero withdrawals. Ask me again in 10 years.

Question for OP: Do RMDs count if you reinvest them all?

[travelover]

Quote:

Originally Posted by ivinsfan Why do you care? It's not one size fits all.

Yea! Of all the nerve, asking a financial retirement question here.

[NW-Bound]

Quote:

Originally Posted by Mdlerth Question for OP: Do RMDs count if you reinvest them all?

Not the OP, but I will not count RMD as withdrawal unless I actually spend it.

I will definitely count the tax withholding as an expense or WR. It shrinks my stash, so how can I ignore it?

[Floridatennisplayer]

Never thought of that since I’m 64. So my curiosity is for prior to that milestone.

[targatom2019]

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

[NW-Bound]

I read in the news about some California state workers getting pension as high as $390K/yr. And it is even COLA'ed.

No IRA needed for these folks, let alone WR.

You would need an IRA/401k of $10M to get that WR.

[rk911]

essentially a zero withdrawal rate. we live off of SS and pensions, 14-years now. and we're still living waaay beneath our income.

[SecondCor521]

My annualized spending is 2.34% of my FIRE stash. I have what I refer to as NPI (Non-Portfolio Income) of various sorts (side gigs, etc.) which total 1.72% of my FIRE stash, so my net WR is 0.62%.

However, I make all sorts of adjustments and provisos to get to that number which may not pass muster with anyone else even if they make sense to me.

FIREd, age 50.

[Souschef]

Quote:

Originally Posted by Floridatennisplayer You have been withdrawing from your portfolio. I’m talking about zero portfolio withdraws. Where your income (SS, pensions, part time job, annuity) covers your annual expenses.

Our income from SS and pensions covers all our regular expenses. However, the RMD is used to pay taxes and gifts for our sons and to charities.

[daylatedollarshort]

After this year, pensions, SS, some odds and ends income and .29% WR will cover our planned retirement expenses, though we have talked about upping the WR rate to 1%.

[Alan]

We will stop making withdrawals in 2 years when we start taking US and UK SS, and also we will have completed our IRA to Roth conversions. (We currently are receiving 4 private pensions)

[FIREd]

Quote:

Originally Posted by audreyh1 The opposite here. No income streams at all yet, and only SS expected in the far future. So all living expenses are supplied by the portfolio.

+1. WR below 2%.

[GenXguy]

I'm not FIREd yet, but my current spending is slightly over 1% of my FIRE stash. SS would pay 100% of my expenses, but due to discretionary, I expect to have a 2% WR even at that point and probably close to 4% prior to SS kicking in. Currently, job pays for everything and can save 70%-80% to build stash, so I have a negative withdrawal rate.

[socca]

Quote:

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

My preferred approach is to reject "safe withdrawal rate" as a framework for retirement financial planning, rather than claim a "zero withdrawal rate". I use the old-fashioned (obsolete?) approach of defining my means as my income, and live within that.

[wmc1000]

Now that we are both receiving SS, (started at FRA), our WR has dropped to zero.

[ShokWaveRider]

We just use/withdraw the dividend returns on our stash. It does not go up by much annually but it has not started to deplete yet after 10 years being FIREd either. We do not take SS or my UK pension yet either.

Currently I would estimate, just like European Interest Rates our stash gives us about 1% to use it.