Poll on I don't know my withdrawal rate

[Martha]

I know there is a surfeit of engineers and other numbers types on this forum. But, I imagine there are many here who don't track their withdrawal rate and simply spend what they need to spend, keep an eye on the portfolio, adjust spending down if things are looking a bit worrisome, and maybe spend more if things are going gangbusters. Fess up, do you know your withdrawal rate? If not, how do you decide how much to spend?

[uncledrz]

Pull funds out once a year for that year's estimated expenses so we have a pretty good idea of our withdrawal rate.

[Mr._johngalt]

Quote:

Originally Posted by Martha I know there is a surfeit of engineers and other numbers types on this forum. But, I imagine there are many here who don't track their withdrawal rate and simply spend what they need to spend, keep an eye on the portfolio, adjust spending down if things are looking a bit worrisome, and maybe spend more if things are going gangbusters. Fess up, do you know your withdrawal rate? If not, how do you decide how much to spend?

I voted "No idea", and I am a "numbers type" in spades. Mostly how
I made my living when I worked, starting out in cost accounting.
With me, it's all about net worth. I plan for that not to decline, ever.
If it did, I would cut back. Lots of contingency
plans are in place, just in case.

JG

[brewer12345]

Quote:

Originally Posted by Mr._johngalt I voted "No idea"

Well, I must say that I am shocked, shocked to hear this.


Not.

[Mr._johngalt]

Quote:

Originally Posted by brewer12345 Well, I must say that I am shocked, shocked to hear this. Not.

Yeah, not only do I not know, I don't care. Like I said, almost heresy
on this board.

JG

[shiny]

Our plan is to not take a set percentage out. We'll just keep an eye on 2 numbers: 1. the balance of the cash account (to which various dividends, interest payments, etc are going) and 2. the total net worth.

We'll just spend what we want until these are out of boundaries that we've decided on. If the cash gets too high we'll step up the spending, if the net worth starts going down we'll decide if it is drastic enough to cut back.

Of course we'll sell some along the way and the networth is scheduled to eventually go down, just not in a set percetage plan.

[haha]

I keep very close tabs on SWR. If my assets increase by an unusual percentage, I look upon it the same way a professional sports bettor looks at a run of wins- just a temporary loan from the big Wheel of Fortune in the sky, sure to be reversed in due time.

I don't trust a more liberal approach.

Ha

[Khan]

0%

Living on the pension.

That might change next year.

[sgeeeee]

Quote:

Originally Posted by Mr._johngalt I voted "No idea", and I am a "numbers type" in spades. Mostly how I made my living when I worked, starting out in cost accounting. With me, it's all about net worth. I plan for that not to decline, ever. If it did, I would cut back. Lots of contingency plans are in place, just in case. JG

Huh?

Haven't I seen you post your annual expenses before? And haven't you often told us your net worth? So what's the issue? Don't know how to divide?

[Mr._johngalt]

Quote:

Originally Posted by sgeeeee Huh? Haven't I seen you post your annual expenses before? And haven't you often told us your net worth? So what's the issue? Don't know how to divide?

It's quite complicated, and since I don't care, I don't bother.
Let's just leave it at that.

JG

[riskadverse]

I have to admit that I don't know mine. I do calculate our net worth every six months or so and as long as I don't see something alarming, I've been happy to pursue this ostrich method. Unfortunately my net worth method is prone to quite an error with the value of the house being so subjective and large.

[audreyh1]

How many people include their house value when they compute their withdrawal rate?

Audrey

[Martha]

Quote:

Originally Posted by HaHa If my assets increase by an unusual percentage, I look upon it the same way a professional sports bettor looks at a run of wins- just a temporary loan from the big Wheel of Fortune in the sky, sure to be reversed in due time. Ha

Sounds just like my spouse.

[bosco]

Quote:

Originally Posted by audreyh1 How many people include their house value when they compute their withdrawal rate? Audrey

only if my house comes in modular pieces that I can withdraw and sell for living expenses.

[tryan]

Best I can do is guesstimate ... yes, I can divide; but there's alot of grey areas in spending vs. investments (given the water front rental we're putting online).

[Nords]

Quote:

Originally Posted by sgeeeee Huh? Haven't I seen you post your annual expenses before? And haven't you often told us your net worth? So what's the issue? Don't know how to divide?

It's a dumpster diving divorce prenup CEO titan of industry accounting NOL taxation no stocks real estate employee hiring, firing, & mentoring high yield bonds back of the envelope photo scanning & posting Mensa thing.

We just wouldn't understand.

Quote:

Originally Posted by audreyh1 How many people include their house value when they compute their withdrawal rate?

Not me. Our home equity isn't part of our retirement portfolio until it's converted to cash and deposited in the portfolio. Anyway I'd sure hate to ask my spouse to choose among me, the house, or the portfolio...

Quote:

Originally Posted by bosco only if my house comes in modular pieces that I can withdraw and sell for living expenses.

That's called a "home equity loan" or a "reverse mortgage".

[haha]

Quote:

Originally Posted by Martha Sounds just like my spouse.

Anxiety neurotics Great minds think alike.

Ha

[mickeyd]

I'm still about 7-8 years away from when I plan on tapping my stash. We will plan on living on a combination of saved cash/pensions/SS/work during the next 7-8 years.

When I begin making withdrawals, my plan is to identify what my 4% SWR converts to in dollars. I will then take 25% of that number at the beginning of each quarter (1% of total stash). For example, say my stash is $1M and we are at Jan 1, I will take distribution of 1% or $10,000 that would last me until April 1st.

Around 4/1, I will take another $10,000, however if I still have not spent $4000 from the previous quarter, I would take an allocation of only $6000 for the second quarter (4+6=10k).

If I need to spend more that $10k in a quarter, I would not hesitate to grab it and run as long as I have not gone over the $10k limit within the last year or so and the amount is not an amount that would cause me long-term financial harm or is in a bear market. That would be a common-sense decision to be made at that time with consultation with DW.

There are probably a lot of holes in the plan, but I want it to be very simple and easy to administer. I figure that as I get older these kind of decisions may be more and more difficult to make. If I have already thought it out, and try to stick with the plan (stay the course), it may work best for DW and me.

I'll let you know in about 30 years if my plan has worked.

[REWahoo]

My first year withdrawal rate was 4.363366%. Exactly.

[Mr._johngalt]

Quote:

Originally Posted by Nords It's a dumpster diving divorce prenup CEO titan of industry accounting NOL taxation no stocks real estate employee hiring, firing, & mentoring high yield bonds back of the envelope photo scanning & posting Mensa thing. We just wouldn't understand.

Gosh, I just love it when you pay attention.

JG