Poll:To those who retired or retiring very soon - what is your comfy withdrawal rate?

[Magus]

I'll be retiring in a bit less than 3 years at the age of 43 so this topic is near and dear to my heart since I'll have a 40-50 year left of life expectancy to make it last. I expect and hope it will effectively be a 0% withdraw rate as half my net worth outside primary home is in rental properties which currently generates ~5.75% annual cash flow on its current equity net of mortgages.

If you include that cash distribution as a withdraw, then closer to 3% withdraw rate max with a min of 2%. I'm hoping to leave everything else untouched, except perhaps in some years some roth conversions. Any extra needed for lumpy expenses I'm hoping and expect stock dividends will cover. Once I get to SS/Medicare ages, It'll get even easier.

If I had a 70/30 portfolio instead of 40/10/50 (RE) I'd probably feel safe with 2.25-2.5% withdraw rate.

 

[bizlady]

We hit our own trifecta- always worried about SOR at age 65, and here we are at age 65, down market, need a new vehicle ;-(

 

[scrabbler1]

I'll be retiring in a bit less than 3 years at the age of 43 so this topic is near and dear to my heart since I'll have a 40-50 year left of life expectancy to make it last. I expect and hope it will effectively be a 0% withdraw rate as half my net worth outside primary home is in rental properties which currently generates ~5.75% annual cash flow on its current equity net of mortgages.

If you include that cash distribution as a withdraw, then closer to 3% withdraw rate max with a min of 2%. I'm hoping to leave everything else untouched, except perhaps in some years some roth conversions. Any extra needed for lumpy expenses I'm hoping and expect stock dividends will cover. Once I get to SS/Medicare ages, It'll get even easier.

If I had a 70/30 portfolio instead of 40/10/50 (RE) I'd probably feel safe with 2.25-2.5% withdraw rate.

When I was doing my ER planning in 2006-08, leading up to my eventual ER in late 2008 at age 45, I split my ER plan into 2 parts. The first part was using only the taxable of my portfolio to get me to age ~60. This would be the more challenging part. After that, my "reinforcements" begin to arrive, starting with unfettered access to my tIRA at around age 60, followed by SS and my frozen company pension. That, as you know, will make things only easier.

I am 59 now, and I have made it through the first part of my ER plan just fine, even better than I had planned. Part of that was due to the markets which rebounded nicely after the 2008-09 lows. But another reason was the ACA which made HI more affordable, especially with the premium subsidies I have captured in some years but not always. I won't need to tap into my tIRA, and I wouldn't want to, because it would reduce my ACA subsidy a lot.

 

[DawgMan]

So here's a question as a newbie (2022 is yr 1 of withdrawals)... I had set up effectively a 2 bucket system at the beginning of the year so I have 10 years of a combination of cash (2 yrs), laddered individual bonds (3 yrs), and some short term bond ETFs (5 yrs) with anything over 10+ years in equities (+/- 65/35 AA today). Arguably, in theory I took my withdrawal at beginning of year when my PF balance was a good bit higher (<2.5% WR). Lucky me hitting stride with SORR, my WR is now over 2.5%. I realize it is still a relatively low WR, but I sure hate seeing PF balance drop like it is and cannot help but recalculate my WR based on current balance vs. the beginning of the year. Do you mentally do the math when your planned spend $$ come out or base on the low PF balance during the year? I know it's mental gymnastics, but just trying to steady my sea legs as the training wheels come off.

 

[mathjak107]

I have been using bob clyatts 95/5 method going on 7 years now .

We run an actual draw of about 3.50%

 

[pacergal]

Interesting - To those with 0% withdrawal or negative withdrawal and you're above 60 - 65 .. are you planning to leave your nest egg to your kids ? and I guess you'll pay big taxes to make huge withdraws when you hit 72 years old with mandatory withdrawals hitting bigger withdrawal laters.

Yes, planning on leaving the majority to our two kids, barring any LTC or unplanned medical needs.

Taxes are always part of the equation, already in a higher tax bracket and would rather not pay any more sooner than needed. It is what it is. Blessed to be in this position.

 

[exnavynuke]

I'm 45, planning on retiring before I'm 50. The optimistic goal was 2024, I'll likely be pushing that now, but maybe not. Either way, the initial withdrawal rate is "planned" to be ~6.4%, but that drops to about ~5.5% in 2024 as one bill falls away. Then, in 2027 it drops again to ~4% when the mortgage is gone. Of course, that doesn't take into account my VA income. Including my VA income, it's roughly 3.5% of my portfolio withdrawn to cover spending to start with, dropping from there as the first bill and then the mortgage disappear.

Then, in my 60's, SS will kick in some amount on top of that.

 

[523HRR]

Deferred Comp payouts have more than covered our annual spending/taxes, so have not had to withdraw from investments since retiring 10 years ago.

 

[FLJim]

Unsure How To Calculate Withdrawal Rate

Retired 11 years ago with a NW of $2M. Now NW is north of $3M and we are spending as much as we can. So what is my withdrawal rate?

 

[TheWizard]

Retired 11 years ago with a NW of $2M. Now NW is north of $3M and we are spending as much as we can. So what is my withdrawal rate?

I'm guessing 5% or more?

 

[youbet]

Retired 11 years ago with a NW of $2M. Now NW is north of $3M and we are spending as much as we can. So what is my withdrawal rate?

How much are you withdrawing? Can't calculate your WR with a denominator of "as much as we can."

 

[TheWizard]

How much are you withdrawing? Can't calculate your WR with a denominator of "as much as we can."

That's actually the numerator, but your point is correct...

 

[Surewhitey]

Deferred Comp payouts have more than covered our annual spending/taxes, so have not had to withdraw from investments since retiring 10 years ago.

Deferred Comp is a great idea for those who are in this boat. It saved our bacon when moving out of California to take ours. It "paid" for a 3-4 year sabbatical in our case...

I wonder how many people do it. DW's boss was amazed & surprised by her 50% election on top of her maxing the 401k... He said he never thought of why it works for some...