Do you have a zero withdrawal rate?

[pb4uski]

I think if you can look back 5 years after retirement, and you have more money than you started the game with...than you definitely 'WON' the game. ...

I guess that we won. 125% of what we started with 7 years ago... and withdrawals include not only normal spending buying a winter condo and building a new 2-car garage with attic loft and paying cash.

 

[Rustic23]

Been retired about 14 years, give or take a couple. Only withdrawal is RMD, which is reinvested into taxable account. Yes, I planned it! I stayed with the Air Force for 20 years, I worked for two other employers which had nice pension plans. DW also worked and has an IRA. Current income more than covers all expenses. Only real problem is the money coming out in RMD's is taxed at a higher rate than it would have been when it was put in.

Having said that, both DW and I admit to being very fortunate it has worked out as it has.

 

[street]

Been retired about 14 years, give or take a couple. Only withdrawal is RMD, which is reinvested into taxable account. Yes, I planned it! I stayed with the Air Force for 20 years, I worked for two other employers which had nice pension plans. DW also worked and has an IRA. Current income more than covers all expenses. Only real problem is the money coming out in RMD's is taxed at a higher rate than it would have been when it was put in.

Having said that, both DW and I admit to being very fortunate it has worked out as it has.

You had a plan and worked that plan to a T. Mission accomplished!

With the plan that has worked well till RMD, does having to take that money out make you have less, in portfolio over the long haul? I know that questions has many variables but do you feel you can maintain your status quo and still have your portfolio grow in value (RMD gets reinvested) instead of your portfolio decrease??

 

[SecondCor521]

If you are at 0% WR then it seems you worked waaaaaayyy too long and could have retired much earlier.


Nothing to brag about IMHO. . .

On this point:

I hit 25x expenses about 2 years before I actually FIREd.

At that point, the job was still fun, I was making good money, and my kids were still unsure as to where any of them would finish their bachelor's degree, much less with what major and in what time frame. I also didn't know what Mr. Market or my stock options might do.

Two years later, the job was awful, my Mom was dying, Mr. Market and my stock options had turned out well, and I decided that I could roll the dice with my kids - if they went to more expensive schools then I'd just go back to work.

I FIREd.

Three years later, my Mom had died and I received some life insurance proceeds, Mr. Market has continued to be nice, and my kids have either picked cheap schools or have received good scholarships. And I unexpectedly picked up a side gig or three that pay for about 2/3 of my expenses currently.

So things have turned out better than the absolute worst that they could have. This is not surprising; that is what happens most of the time. But I planned for the absolute worst just in case. I did not want to count on these things happening. They did, but there was no reason to believe three years ago that they necessarily would.

Hindsight is 20/20, and my crystal ball is in the shop.

 

[GenXguy]

I think if you can look back 5 years after retirement, and you have more money than you started the game with...than you definitely 'WON' the game.

You can be very optimistic, but you won't really know whether or not you've won the game until you've failed or died. **** can happen anytime.

 

[daylatedollarshort]

We don't have huge pensions but we are freedom is low overhead types. So for us low overhead means living on about half of what we could. We don't buy a lot of consumer stuff and we're cheap dates.

 

[copyright1997reloaded]

Late to the thread because I've been busy w*rking. (Week 2 of the new school year.) Assuming no work, I should be able to meet my ongoing expenses with my old mega-corp pension plus social security (once I reach 62). But I don't because I spend more than I need to if I were serious about the budget. And I won't because I intend to defer social security - at least while I continue to work and likely after that in order to do some Roth conversions. Eventually I hope to be in the position where my normal operating expenses are met by pension + social security income flows.

 

[Rustic23]

My real RMD is at a SWR of .75%. I believe my kids will end up with the IRA's. I have know idea if there will be any money left in the IRA, but there will be in the taxable account.

 

[bada bing]

My retirement spending plans include getting to the possibility of a comfortable "zero withdrawal rate" budget at age 70, when I'll start SS and deferred pension. My reason is for protection against cognitive decline and from relatives who may be willing to "help out" on the spending front. Strictly from a financial perspective, lump sum of my pension would make sense, but I have observed in solo aging male relatives that guaranteed income has some protection from pilot induced errors that can't be ignored.

For the next 9 years, until age 70, I'm guessing my WR might go as high as 6%. Maybe even more. Looking forward to it

 

[freetodream]

The zero withdrawal rate has been working for us until we have a large expense like a car, vacation or something else above our "normal" expenses.

 

[gerntz]

- Have to withdraw RMD. Part of it goes to charities. Rest gets reinvested.
- Gift shares of stock to family members from time to time, so that's withdrawal.
- Otherwise, live off SS, dividends & interest, & rental income. No pension.

 

[Midpack]

My real RMD is at a [-]S[/-]WR of .75%. I believe my kids will end up with the IRA's. I have know idea if there will be any money left in the IRA, but there will be in the taxable account.

With respect and without malice, FIFY.

- Have to withdraw RMD. Part of it goes to charities. Rest gets reinvested.
- Gift shares of stock to family members from time to time, so that's withdrawal.
- Otherwise, live off SS, dividends & interest, & rental income. No pension.

Same here, we’ve lived off dividends and interest only so far, no pension and haven’t started Soc Sec yet. RMDs still 5-7 years away. But the OP had a “different” definition of “zero withdrawal.”

 

[RobbieB]

Yeah, you can have a one hundred dollar CD portfolio and live off your pension and SS with a zero WDR. You can be even stackin' the extra for a negative rate.

Woo-hoo!

 

[eroscott]

Why do you care? It's not one size fits all.

Yes, unclear that the OPs intention is? Bragging perhaps It would be darn funny to include an Annuity if you ask me. Otherwise, anyone withdrawing from their IRAs could do that ... just buy an annuity and state you make no withdrawals from your 'investments'. HAHAHA

 

[street]

Yeah, you can have a one hundred dollar CD portfolio and live off your pension and SS with a zero WDR. You can be even stackin' the extra for a negative rate.

Woo-hoo!

LOL! Absolutely true.

 

[calmloki]

I'm tickled every time my SS hits the bank - all $215 of it. OTOH, been on SS since 62 and coming right up on 70 this year, so that's 8 years of spendable money plus what gets taken for medicare. No pensions or annuities or IRA/Roth stuff. Our homes and rentals are free and clear, we don't take anything out of the money we have in Vanguard, and I'd be hard pressed to guess our annual spending within $10k. Loans and property sales and rentals and interest on CDs and savings keep us plenty solvent and our lifestyle also conspires to make our net worth grow by a silly amount each year. Just a game, like taking advantage of credit card/savings bonuses, which I do, because why not.

 

[Oversoul]

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

My spouse and I don't know what to do with our SS, let alone any investment money so, I guess you could say our withdrawal rate is zero.
We just posted another thread about this. Maybe you have some suggestions. We aren't sure what we should be doing.....if anything.

 

[teejayevans]

My spouse and I don't know what to do with our SS, let alone any investment money so...

Let me give you my address where you can send a check of your “excess” money.

 

[Oversoul]

Let me give you my address where you can send a check of your “excess” money.

Ha ha.....I know, many people probably wish they had this problem but it is a very real issue. After you've spent your life sacrificing & saving, you have a responsibility to do something with that money after you die.
Being young & broke used to keep me up at night.
Now, being old & not broke keeps me up at night.


There's no winning at this.


Stay well.

 

[GenXguy]

After you've spent your life sacrificing & saving, you have a responsibility to do something with that money after you die.

After you die, it will be too late. Because you will be dead. But then, you probably won't care.

 

[Oversoul]

After you die, it will be too late. Because you will be dead. But then, you probably won't care.

Of course, you are correct. But at this period in life it is troubling to have investments that you know you won't use but that you'd like to do some good when you're gone. And we certainly don't want it to end up in the hands of the government for some agency to squander away on something we may have been opposed to in life.


Stay well.

 

[Dtail]

Well always saving every year, but also spending quite a bit, we had no issues moving into the retirement spending mode, while still keeping a detailed budget/spending log each year.
This works for us.

 

[ivinsfan]

Ha ha.....I know, many people probably wish they had this problem but it is a very real issue. After you've spent your life sacrificing & saving, you have a responsibility to do something with that money after you die.
Being young & broke used to keep me up at night.
Now, being old & not broke keeps me up at night.


There's no winning at this.


Stay well.

If you are serious, this is sad....

 

[rk911]

...After you've spent your life sacrificing & saving, you have a responsibility to do something with that money after you die...

such as? i can’t imagine anyone not making any arrangements.

 

[aja8888]

No pension, just SS and RMD's (both over 70).

No debts, but healthcare costs are filling in for those. Dental expenses in 2017 & 2018 could have bought a new Ford F150 Pickup truck, cash.

RMD withdrawal rate is about 4%. Between that and SS, we cover all expenses, but are not living "high on the Hog" so to say.