Porkfat

[Porkfat]

I have a question regarding withdrawal rates. I "retired" at 56 and while I do some consulting and teaching, I am not anywhere near my earned income level pre-retirement. So I rely on my asset earnings to help me through. The normal rule is to not take more than 4%. When I use advanced firecalc, it allows a 95-100% success rate when I am taking anywhere from 5.3-5.8%. So I am a bit confused. I'm trying to stick to the 4% level, but there are times when I need a bit more for various things. Any advice?

[REWahoo]

If you are entering your data into FIRECalc correctly and it gives you 95%+ success rate at greater than 5% W/D rate, there is no reason to limit yourself to 4%. FIRECalc was designed to include all aspects of your retirement income in your withdrawal scheme, and the 4% rule applies only to your nest egg, excluding pension, SS or other income.

FIRECalc says I can start out at 5.8% for the first few years (I retired at age 58 - living off my portfolio only), but I know when SS kicks in the withdrawals from my portfolio will decrease to well below 4%. That's one of the real values of FIRCalc.

[Porkfat]

Good points. I also have an investment property that I I rent out but do not include in FireCalc - but I also do not count the income when I do Firecalc since it is separate from my liquid assets. At some point I will sell it and that will increase the nest egg, though some will go to pay off an existing home mortgage. I just get a bit nervous, as I can live very comfortably at 5.3%, but it gets a little dicey at 4%. Thanks for the assistance and comment.