Poll: Primary Retirement Income Source

[Stevewc]

Right now mine is pension but this will likely change (% wise) as time goes on. With DW still working its a no brainier but when she decides to stop things immediately change into a different gear. Going by some health issues (hers) this may happen sooner than I thought or planned, sorry to think or say.
Steve

 

[chinaco]

Most of the methods listed are not mutually exclusive.

My approach will be a blend of several of the general methods listed in the poll.

 

[Midpack]

By "SWR/Constant percentage approach" do you mean x% corrected for inflation annually, or do you mean x% of portfolio value each year, disregarding inflation?

either...

And for others, the Norwegian widow choice could mean dividends only, gains only or any combination. It would be impossible to name every possible approach, the intent was to put answers into general bins so to speak.

 

[Midpack]

This is amazing. In answer to the question,
so far, half of the members here are selecting "pension, annuity, etc."!

That is not the case for me, and I would not have guessed that this poll would turn out like this.

I'm not surprised by that aspect, there was a FIRE vs SIRE poll awhile ago and SIRE was about 2/3rds of this audience. Makes sense in that pension/annuity folks would mostly have Soc Sec too, hence 2/3rds (vs half in this poll).

Another topic, but that's why it concerns me when mostly FIRE folks (like me) post questions and then read answers from others who may be mostly SIRE folks. Ideally, SIRE or FIRE would be in everyone's sig, but I don't really expect to see that happen.

 

[Rambler]

I went with Norwegian widow, because I intend to have enough income from that to cover my planned <3% SWR. However, I intend to re-balance and to keep to the WR plus or minus 50bps, even when stock prices might be down and therefore yield percentages up, or vice versa. At a 3% WR, that allows a 16.7% window up or down, which means I don't have to cut the budget unless the portfolio drops by 16.7%. Even then, so long as my dividend stocks and munis keep paying out, it just means I cut the budget and reinvest more of the dividends.

Alas, this is the plan, we'll see what reality brings in a couple of years.

R

 

[BigNick]

I'm not surprised by that aspect, there was a FIRE vs SIRE poll awhile ago and SIRE was about 2/3rds of this audience.

What is SIRE? Couldn't find it in the jargon file.

 

[REWahoo]

What is SIRE?

Secure Income, Retired Early

 

[donheff]

By "SWR/Constant percentage approach" do you mean x% corrected for inflation annually, or do you mean x% of portfolio value each year, disregarding inflation?

either...

And for others, the Norwegian widow choice could mean dividends only, gains only or any combination. It would be impossible to name every possible approach, the intent was to put answers into general bins so to speak.

I had the same concern as RiT but selected the SWR item as it seems closest to what we do. Hard choice between pension and SWR since they are almost the same amount.

 

[Alan]

What is SIRE? Couldn't find it in the jargon file.

Secure Income, Retired Early

I've added it to the acronyms list.

I'm not surprised at the poll results either given the discussions in recent years.

 

[sn2792]

I responded incorrectly with SWR, but should have said Pensions, annuity, etc.

My DH and I retired in the last couple of months at 56 and 57. We are living on my partial non-cola annuity and withdrawals from my 401K. Our lump sum pensions and DH's 401K rolled to IRA. We will continue to supplement pension with investment withdrawals until we start SS at 66. Our withdrawal amounts at that point will be very small. We are fortunate to both have paid medical insurance from our former company.

 

[youbet]

I'm not surprised at the poll results either given the discussions in recent years.

Based strictly on my recall (always subject to question! ) there has definitly been a shift from discussions involving early retirement based on FIRE portfolios towards early retirement based on pensions, especially gov't pensions. There has also been a shift from discussion involving how to safely spend more of your portfolio while adding minimal risk of running out of money towards towards leaving a mountain of money behind is fine as long as it meant you had absolute security of not running out of money. Goes along with economy I guess.

 

[Alan]

Based strictly on my recall (always subject to question! ) there has definitly been a shift from discussions involving early retirement based on FIRE portfolios towards early retirement based on pensions, especially gov't pensions. There has also been a shift from discussion involving how to safely spend more of your portfolio while adding minimal risk of running out of money towards towards leaving a mountain of money behind is fine as long as it meant you had absolute security of not running out of money. Goes along with economy I guess.

I think this is what I was thinking of - Just over a year ago Midpack did a poll asking how many would have more than 50% of the retirement income from pensions / annuities (SIRE).

The result then had 37% saying they would be SIRE'd. So far this poll has it at 42%.

 

[Nords]

Based strictly on my recall (always subject to question! ) there has definitly been a shift from discussions involving early retirement based on FIRE portfolios towards early retirement based on pensions, especially gov't pensions. There has also been a shift from discussion involving how to safely spend more of your portfolio while adding minimal risk of running out of money towards towards leaving a mountain of money behind is fine as long as it meant you had absolute security of not running out of money. Goes along with economy I guess.

Another part of it may be that SPIAs are offering more for the money than they were 10 years ago. Annuitizing a portion of ER income (with, for example, a pension) has always been a good idea but it wasn't always worth the expense.

 

[youbet]

One of the things folks should consider when deciding whether they are FIRE or SIRE is how their entire retirement will be funded. For example, you retire at 55 and decide to delay a pension until 65 because the formula favors those who delay. For 10 years you live off portfolio withdrawals and at 65 start a generous, COLA'd pension which covers all your expenses the rest of your life. I'd say that is a SIRE situation despite the fact that you could honestly say anytime during your first 10 years that you're living strictly off of portfolio withdrawals. You have to look at the whole picture.

I also remind everyone that talking about withdrawal rates without a mention of time period is silly. I guess we all pretty much assume 30 yrs when the time period isn't mentioned. Still, when folks talk about taking a large initial WR at the beginning followed by lower rates when SS and/or pensions start, it should be no surprise that large WR's work for short periods and should not be compared to 30 year periods.

 

[VaCollector]

I chose the SWR option only because that d*mn Norwegian Widow didn't do a real good job of watching out for those of us fools who thought that bank stocks might carry us AND because your inquiry indicated what source IS/WILL as I have been fortunate enough to have avoided any withdrawals thus far... choosing to supplement my needs with the wonders of eBay

 

[beowulf]

This is amazing. In answer to the question,
so far, half of the members here are selecting "pension, annuity, etc."!

That is not the case for me, and I would not have guessed that this poll would turn out like this.

We may well be the last generation to have substantial DB pensions, whether from government or industry. I have several friends receiving pensions from private companies that no longer offer such benefits. For the government, we know that FERS succeeded CSRS in 1984 and the number of workers who have not retired and are eligible for CSRS pensions is rapidly declining.

I know that my wife and I planned our entire strategy around that CSRS pension. Without it, neither of us would be able to retire for many years.

 

[easysurfer]

For me, SWR, followed by pension/annuity.

 

[Midpack]

We may well be the last generation to have substantial DB pensions, whether from government or industry.

I consider it a given, but we'll see...

 

[Midpack]

I'm not entirely surprised that SWR and pension/annuity are dominating and neck-and-neck.

However, I am surprised that the other non-pension options have fared so poorly. An FPA article from Dec 09 that someone reposted, and I read recently, said that 80% of FP clients were using an SWR variant before the Great Recession - but that had declined to 40% SWR by the end of 2009. I was assuming buckets, dividends only (or well into old age at least) and other approaches had rapidly gained in popularity. Evidently not with this crowd at least...

The polls are still open, but thanks everyone (so far).

 

[NW-Bound]

I chose the SWR option only because that d*mn Norwegian Widow didn't do a real good job of watching out for those of us fools who thought that bank stocks might carry us AND because your inquiry indicated what source IS/WILL as I have been fortunate enough to have avoided any withdrawals thus far... choosing to supplement my needs with the wonders of eBay

Well, we all know by now your Norwegian Widow (BAC) made a grave error of getting into subprime loans, CDS's, CDO's and all that junk. But then, she got hitched to the rich Uncle Sam, whose generosity surely helped. She's a widow no more.

If eBay helps you that much, dang, maybe I should look into selling too. I have only been a buyer, and have never sold anything. But then, perhaps you have more valuable stuff to sell, while I only own junk.

 

[youbet]

I'm not entirely surprised that SWR and pension/annuity are dominating and neck-and-neck.

However, I am surprised that the other non-pension options have fared so poorly.

That's because the other non-pension options are typically subsets of the SWR or pension option. If a pension makes up 55% or your retirement income and you get the rest via the "Norwegian Widow," then the poll choice is "pension." Right?

 

[obgyn65]

This survey includes answers that are not mutually exclusive. For example, "Pension/Annuity" maybe part of an overall / primary "SWR/Constant percentage approach" or can include a significant amount of "part time/sporadic work". Is it possible to setup surveys with mutiple choice formats ?

 

[Alan]

That's because the other non-pension options are typically subsets of the SWR or pension option. If a pension makes up 55% or your retirement income and you get the rest via the "Norwegian Widow," then the poll choice is "pension." Right?

That is my situation. My pension is currently 70% and the rest is SWR, but that will change over time as the pensions are not COLA'ed.

 

[Alan]

This survey includes answers that are not mutually exclusive. For example, "Pension/Annuity" maybe part of an overall / primary "SWR/Constant percentage approach" or can include a significant amount of "part time/sporadic work". Is it possible to setup surveys with mutiple choice formats ?

Yes, polls can be multiple choice.

 

[W2R]

Yes, polls can be multiple choice.

However, the question here was

Excluding Soc Sec, what is/will be your PRIMARY retirement income approach?

So to me, it seems like the poll was set up properly for that question.