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Old 08-25-2017, 02:46 PM   #61
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Everyone here is wrong, the correct answer is 2.73489% Anything else will just fail utterly.
NO... u r wrong, very wrong... it's 2,734891%
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Old 08-25-2017, 03:27 PM   #62
Recycles dryer sheets
 
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Originally Posted by HadEnuff View Post
Actually, I thought the correct answer was 3.14159. It also helps figuring out things pertaining to circles.

It is an amazing number.
That's actually the number I am using. I know that is irrational but I'm sticking to it

Best
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Old 08-25-2017, 03:56 PM   #63
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Old 08-25-2017, 05:31 PM   #64
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I'm surprised that more people dont seem to use % of remaining portfolio. I guess too volatile?
This is what I do. To somewhat address the volatility, I use a three year average to slow the increase when it spikes and slow the decrease when it tanks.

We allocate a pretty large chunk to travel which in a prolonged downturn could be eliminated without too much pain.
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Old 08-25-2017, 08:10 PM   #65
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The "% of present portfolio" method works really well the last few years. I enjoy it, heh heh heh.

Comes the next big recession, it is going to be pretty tough if it is something cataclysmic like what happened in 2008-2009.
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Old 08-25-2017, 08:25 PM   #66
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This is what I do. To somewhat address the volatility, I use a three year average to slow the increase when it spikes and slow the decrease when it tanks.

We allocate a pretty large chunk to travel which in a prolonged downturn could be eliminated without too much pain.
That's what Vanguard does with their Managed Payout Fund, they try and do a 4% pay but adjust every year with the last 3 years.
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Old 08-27-2017, 10:49 AM   #67
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Any withdrawal rate is safe, as long as it's constant. In other words, if your withdrawal rate is 4% and your portfolio is $500,000, you withdraw $20,000. Next year there's a bear market, portfolio value declines to $400,000? You withdraw $16,000. Given that markets tend to recover, not too painful ... and you get big raises over the years immediately following.
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Old 08-27-2017, 11:37 AM   #68
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Any withdrawal rate is safe, as long as it's constant. In other words, if your withdrawal rate is 4% and your portfolio is $500,000, you withdraw $20,000. Next year there's a bear market, portfolio value declines to $400,000? You withdraw $16,000. Given that markets tend to recover, not too painful ... and you get big raises over the years immediately following.
Regarding that "not too painful" comment....

Model that in firecalc and you'll see that there are long periods where you'll have to tighten your budget significantly. Bob Clyatt has a rememdy - a slower ratcheting down of spending in his 4%/95% rule.
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Old 08-27-2017, 02:47 PM   #69
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Regarding that "not too painful" comment....

Model that in firecalc and you'll see that there are long periods where you'll have to tighten your budget significantly. Bob Clyatt has a rememdy - a slower ratcheting down of spending in his 4%/95% rule.
Comparing the scenarios in FIRECALC I've noticed that for a really bad run like 1965, Clyatt's rule is barely different than a straight 4% of remaining portfolio - very little cushion. This is because Clyatt's rule does not adjust for inflation, and in that run the inflation was what killed you over long periods. 95% of prior year's income is really 92% if prior year inflation was 3% - obviously much less if inflation is much higher.

So in my mind it's not much of a remedy for the belt tightening. You'll still be belt tightening like crazy in terms of standard of living if inflation is strong.
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Old 08-28-2017, 11:32 PM   #70
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The IRS MRD schedule is simple and makes a certain amount of sense. Worth eye-balling.
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Old 08-28-2017, 11:38 PM   #71
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I have been of a mind to live off dividends. Recent investigation indicates that they vary wildly within a year and from year to year and have been declining to my great surprise. A buffer is necessary. More red wine is also necessary.
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Old 08-29-2017, 06:38 AM   #72
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FWIW with a potential need for our savings to last 50+ years, I consider this to be as close to perpetual as makes no practical difference.

I have no confidence in my ability to correctly predict investment returns, inflation, tax rates, expenses or a lot of other relevant things very far into the future so our portfolio is built to at least some extent on guess work.

I've assumed that over the very long term equities and real estate will produce real returns equal to their net yield. I have put most of our assets into real estate and equities and plan to spend less than the net rents/dividends. There is a small allocation to bonds/cash/bullion to provide a cushion against any disruptions to our primary income sources. With this model, my (probably overly optimistic) view is that it does not matter too much what withdrawal rate I assume - I'm only spending what comes in and what comes in will grow over time (though with some volatility).
Best definition of perpetual yet.
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Old 08-29-2017, 07:06 AM   #73
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I have been of a mind to live off dividends. Recent investigation indicates that they vary wildly within a year and from year to year and have been declining to my great surprise. A buffer is necessary. More red wine is also necessary.
This hasn't been my experience. Since retirement in 2006, my total annual divs have never declined. They have just about doubled since then. Still wise to maintain a reasonable cashbuffer though.
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What is a safe perpetual withdraw rate?
Old 08-29-2017, 08:35 AM   #74
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What is a safe perpetual withdraw rate?

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This hasn't been my experience. Since retirement in 2006, my total annual divs have never declined. They have just about doubled since then. Still wise to maintain a reasonable cashbuffer though.


Dividend yields on Canadian stocks are quite good, even if you surround yourself with mega Corp, less risky stocks. My allocation of Canadian stocks are quite small (Most of my assets are still in the US.), but I have been enjoying the dividend income coming out of it.
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Old 08-29-2017, 08:39 AM   #75
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Dividend yields on Canadian stocks are quite good, even if you surround yourself with mega Corp, less risky stocks. My allocation of Canadian stocks are quite small, but I have been enjoying the dividend income coming out of it.
Agree. I am mostly in Canadian Banks, Telcos, Pipelines, and Utilities. Current yield about 3.75%.
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Old 08-29-2017, 10:40 AM   #76
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Agree. I am mostly in Canadian Banks, Telcos, Pipelines, and Utilities. Current yield about 3.75%.
Me too - Canadian banks, telecomm., pipelines, and miscellaneous. (Like I said, I don't have much in the Canadian market, but as a US citizen living in Canada, holding Canadian ETF's/mutual funds in non-registered accounts was not on the table, so I tried to diversify on my own...) I believe my yield is a little over 4%.
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Old 08-29-2017, 10:53 AM   #77
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If you put the money in the bank and know how long you'll live it's easy to calculate a SWR. If you risk money in the stock market and don't know when you'll die you have to use longevity and historical stock market statistics to come up with a probable SWR.

I don't like either of those and so my WR is currently about -2% as I reinvest all dividends.
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Old 08-29-2017, 11:00 AM   #78
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I would have preferred to win the recent powerball but I forgot to buy a ticket. My SWR would have been something like -99%
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Old 08-29-2017, 11:49 AM   #79
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I would have preferred to win the recent powerball but I forgot to buy a ticket. My SWR would have been something like -99%
Good one
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Old 08-29-2017, 02:26 PM   #80
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Agree. I am mostly in Canadian Banks, Telcos, Pipelines, and Utilities. Current yield about 3.75%.
Yes but total return has been over well over 10% for many.

Several even in USD:
Total growth comparisons
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