View Poll Results: What is your annual cash investment income as % of(.04*Invested Assets)
|
<=25%
|
|
9 |
24.32% |
>25%<=50%
|
|
8 |
21.62% |
>50%<= 75%
|
|
9 |
24.32% |
>75%<=100%
|
|
6 |
16.22% |
>100%<=125%
|
|
2 |
5.41% |
>125%
|
|
3 |
8.11% |
|
Poll:For retirees- what is your cash income as % of (.04*Invested Assets)
11-23-2010, 05:46 PM
|
#1
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
|
Poll:For retirees- what is your cash income as % of (.04*Invested Assets)
People who are earning income, please post about that, but do not use it in answering the poll. This intends to find how much of a hypothetical 4% SWR you are funding with cash from interest, dividends, purchased annuities or other cash flow from investment sources. If you include purchased annuity cash flow, include the purchase price of the annuity in total invested assets to be multiplied by the 4% hypothetical SWR amount. Do not count capital gains or capital losses as cash flow, whether they are from mutual funds or individual securities.
Do not include pensions or SS, though please post about these rather than use them in answering the poll.
We talk about these things all the time, but I don't believe we have ever tried to drill down on it.
My cash investment income is greater than 100% of 4% SWR. I really would not feel comfortable otherwise. But most of this is dividend income, so I expect to have reasonably good income response to moderate inflation, over time and on average.
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
11-23-2010, 06:00 PM
|
#2
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
|
I am getting around 1% or less of dividends and interest income from my portfolio. My risk tolerance is high as I still have part-time earned income. When I fully retire, I may scale back a bit. But it is my nature to want lots of cap gains. It makes life less dull. :-)
PS. As my superior memory serves , I remember that there was a thread where the OP asked people about the dividend yield of their portfolio. However, it was not in the form of a poll.
PPS. It's this one: http://www.early-retirement.org/foru...ays-50168.html
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
|
|
|
11-23-2010, 06:06 PM
|
#3
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
|
Quote:
Originally Posted by NW-Bound
I am getting around 1% or less of dividends and interest income from my portfolio. My risk tolerance is high as I still have part-time earned income. When I fully retire, I may scale back a bit. But it is my nature to want lots of cap gains. It makes life less dull. :-)
|
Thanks for posting NW. You interpreted the poll as I intended, and I wasn't sure that I had been clear. our post ressured me that the poll is at least reasonably unambiguous.
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
|
|
|
11-23-2010, 07:17 PM
|
#4
|
Thinks s/he gets paid by the post
Join Date: Jul 2007
Posts: 2,487
|
Not retired, so did not vote. I do not intend to use a 4% rate, but if I did, the cash tossed off of my FI and divvies would fall into the 75-100% range, actually right at 85%. If things go to plan (which would be a first), the throw-off will be more than my cash needs for a very long time. I am trying to balance growth and current income, so I am at 60/40, with a lot of dividends in the 60 along with some growth stocks and funds, and some nice yielding GO munis in the 40. Excess cash will be reinvested in the process of rebalancing and eventually some may eventually be gifted to the kids/grandkids, depending on what happens with estate and other taxes...as I get to the point that I see I can't use it all and can't take it with me.
R
__________________
Find Joy in the Journey...
|
|
|
11-23-2010, 07:24 PM
|
#5
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Posts: 5,381
|
Investment income and rental income covers my expected living expenses by 146%. Investment income accounts for about two thirds of the total.
__________________
Retired early, traveling perpetually.
|
|
|
11-23-2010, 08:54 PM
|
#6
|
Thinks s/he gets paid by the post
Join Date: Jul 2005
Location: Los Angeles area
Posts: 1,708
|
Current yield of portfolio is 3.1% (which is what I try to live on), so 77%.
__________________
learn, work, save, invest, fire
|
|
|
11-23-2010, 09:00 PM
|
#7
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
|
Quote:
Originally Posted by CyclingInvestor
Current yield of portfolio is 3.1% (which is what I try to live on), so 77%.
|
There is no doubt that if someone has the combination of frugality and assets to allow a cash income that covers expenses including taxes, that is a very big help in building a solid long term portfolio success.
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
|
|
|
11-23-2010, 09:34 PM
|
#8
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
|
I'm not fully retired, so I didn't vote.
FWIW: I suspect once I am fully retired I still wouldn't know the answer to the question. My stock and bond funds produce some return from dividends/interest, but also some returns (incl some negative returns) due to changes in price. I know some folks like to separate the income from the price appreciation components, but the ratios will vary a lot from year to year. Total return is what I'll probably be watching a lot closer than that portion of total return attributable to sub-factors.
As a generalization, dividends account for about 50% of the total return of stocks over time. Since I'm nearly 100% equities, I guess it would follow that dividends would account for about 50% of my withdrawals over time.
|
|
|
11-23-2010, 09:37 PM
|
#9
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
|
Quote:
Originally Posted by samclem
I'm not fully retired, so I didn't vote.
FWIW: I suspect once I am fully retired I still wouldn't know the answer to the question. My stock and bond funds produce some return from dividends/interest, but also some returns (incl some negative returns) due to changes in price. I know some folks like to separate the income from the price appreciation components, but the ratios will vary a lot from year to year. Total return is what I'll probably be watching a lot closer than that portion of total return attributable to sub-factors.
|
To me these polls are easy to answer, if someone can accept the instructions. Of course there are a lot of other ways of looking at things, and some perhaps even better. But it's like football, you can always make your own rules but then it's not football anymore.
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
|
|
|
11-24-2010, 05:10 AM
|
#10
|
Recycles dryer sheets
Join Date: May 2010
Location: SW Ohio
Posts: 360
|
My invested assets are 52% taxable accounts and 48% tax free/defer accounts. Since I am living on the interest and dividends from the taxable account, I am living on 50% of (.04 * invested assests). The taxable account is 89% CD ladder, 11% dividends. Since the tax free/defer accounts are about the same AA, it should be 100% or higher. In other words, I don't expect to cash in CDs or sell stock for my 4% SWR.
|
|
|
11-24-2010, 08:15 AM
|
#11
|
Administrator
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,021
|
I have non-COLA pensions that cover the basics and need ~2.5% from my nest egg to cover the target income.
Of that 2.5%, I should get ~1.85% of that from dividends and interest this year so I voted >50% <=75%.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
|
|
|
11-24-2010, 08:56 AM
|
#12
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
|
Not retired, but if I follow all the other directions, then 81%...
__________________
Have Funds, Will Retire
...not doing anything of true substance...
|
|
|
11-24-2010, 09:40 AM
|
#13
|
Thinks s/he gets paid by the post
Join Date: Dec 2009
Location: Alberta/Ontario/ Arizona
Posts: 3,393
|
We have set our spending to equal the sum of portfolio yield and pension after taxes. Portfolio yields about 3.2% all equities and will be about 60% of total income. Could easily reduce spending by 20% if had to. 3.2/4=80% 60 years old pension partially cola'd
|
|
|
11-24-2010, 03:12 PM
|
#14
|
Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
|
I'd guess that interest/dividends are in the neighborhood of 4% of current market value. I'm guessing because I've got money in a bond fund and I don't particularly care about coupon yields there. That's not the same as FireCalc 4% SWR because I'm dividing by current value rather than CPI adjusted value on the day I retired. But I picked 75%-100% anyway.
|
|
|
11-25-2010, 06:00 AM
|
#15
|
Thinks s/he gets paid by the post
Join Date: May 2009
Posts: 1,116
|
We live on my pension and her salary. Confortably enough. My penison will be seriously reduced when I reach 65. I´ve got cash on annual deposits that yield 2,9 % before taxes.
__________________
I get by with a little help from my friends....ta ta ta ta ta...
|
|
|
11-25-2010, 10:35 AM
|
#16
|
Recycles dryer sheets
Join Date: Dec 2006
Posts: 182
|
All of our investments put off some level of income...dividends or interest. This is an important part of our approach to investing at this point in our life. DW has a small amount of pension income, but not nearly enough to cover expenses. We pull additional $$ from taxable account (at this point) as needed to cover expenses, so do not pull any set %. This may change as we've only been doing this for a couple years.
To the original question, at this point, income from our accounts covers all expenses and would exceed a hypothetical 4% SWR.
|
|
|
11-25-2010, 10:50 AM
|
#17
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Posts: 5,381
|
How you calculate interest income might be pretty important too. You can get pretty different results when looking at LTM distributions and "yield to maturity" considering how many bonds are trading at very significant premiums.
Consider the case of someone who's 100% invested in Vanguard's ST Investment Grade bond fund. His portfolio yield based on his LTM distributions was 3.37%. So he might say that his investment income covers 84% of his expenses. But the SEC yield on that fund is only 1.75%, which means that his income is really only covering 43.8% of his expenses and the balance is a consumption of his principal.
__________________
Retired early, traveling perpetually.
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|