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View Poll Results: What nest egg withdrawal rate are you comfortable with?
1.0 - 1.49 percent 9 3.19%
1.5 - 1.99 percent 4 1.42%
2.0 - 2.49 percent 26 9.22%
2.5 - 2.99 percent 42 14.89%
3.0 - 3.49 percent 78 27.66%
3.5 - 3.99 percent 61 21.63%
4.0 - 4.49 percent 26 9.22%
4.5 - 5.0 percent 17 6.03%
more than 5% 19 6.74%
Voters: 282. You may not vote on this poll

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Old 04-13-2017, 08:44 PM   #81
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Originally Posted by CardsFan View Post
I think the concept of spending only/primarily passive income is actually quite popular on this board, if you have the savings to do it. BUT, it is still a withdrawal rate.
Nope. Defining means as gross income is quite different than defining means as a percentage of the current market value of assets. I produce profit & loss and balance sheet reports for my personal finances (essentially running them like a business), so naturally I gravitate to the former definition. Whatever works!
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Old 04-13-2017, 11:30 PM   #82
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Originally Posted by RobLJ View Post
I answered more than 5%, since that will be our rate in a few years before drawing SS. After SS it will be more like 3.5-4% at max.
Similar to us. I answered more than 5% because that is our plan for age 62-69. Then after I start SS at age 70, our withdrawal rates will be equal the RMDs of our tax-deferred pot. Enough flexibility to easily tighten the belt if the market tanks.
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Old 04-14-2017, 02:50 AM   #83
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Originally Posted by Alan View Post
Actual rates have been as follows:

2010 0.00% (unexpected 20% bonus from working in 2009 was nice)
2011 0.86%
2012 1.27%
2013 3.51%
2014 5.40%
2015 5.43%
2016 1.99%

The figure I use in the calculators is 3.5% but we have secure pensions and this year I started drawing a private pension (circa $10k/year), plus my wife will start drawing SS (also around $10k/year) so I can see us upping the withdrawal % from now on as we still have my US and UK SS to come plus my wife's UK SS to come.
I just realized that the above figures are of the % of the starting figure each year but I also keep track of the % of the original starting value as per the Trinity Study. Having a fairly secure stream of pension income to cover the basics is a huge help.

2010 0.00%
2011 0.99%
2012 1.96%
2013 5.89%
2014 9.84%
2015 9.90%
2016 3.53%
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Old 04-14-2017, 03:06 AM   #84
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Yes it's nice to have a couple of sources for SS checks for the extra inflation linked income. I've got 12 years before my UK SS starts at 67 and I'm just about to pay my last UK voluntary NI contribution......just got under the Class 2 deadline. I'm thinking of taking the US SS at age 62....we'll see.
Just a couple of days ago I discovered that my wife is entitled to UK SS (Old Age Pension - OAP) even though she is under the 10 year minimum of contributions. Stupid really, but I'd never re-visited the question after major changes to the scheme in the decades since we'd left. As you know each person gets an OAP based solely on their own contributions and a spouse does not inherit any OAP when their partner dies. But these days people in full time education get credits, and those who leave work to raise children get credits while the children are below school age. Turns out that she actually has 20 years credit, including 2 years working part time between age 16 and 18 at High School, 4 years at university, 7 years until the youngest started school and 7 years working. We plan on buying 6 years past credit (most you can buy) and then doing 4 more years of voluntary contributions until she reaches FRA making a total of 30 years.

It feels like opening a suitcase and finding ~$175k, which is what the pension will be worth if she lives 20 years after FRA.
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Old 04-14-2017, 04:18 AM   #85
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Just a couple of days ago I discovered that my wife is entitled to UK SS (Old Age Pension - OAP) even though she is under the 10 year minimum of contributions. Stupid really, but I'd never re-visited the question after major changes to the scheme in the decades since we'd left. As you know each person gets an OAP based solely on their own contributions and a spouse does not inherit any OAP when their partner dies. But these days people in full time education get credits, and those who leave work to raise children get credits while the children are below school age. Turns out that she actually has 20 years credit, including 2 years working part time between age 16 and 18 at High School, 4 years at university, 7 years until the youngest started school and 7 years working. We plan on buying 6 years past credit (most you can buy) and then doing 4 more years of voluntary contributions until she reaches FRA making a total of 30 years.

It feels like opening a suitcase and finding ~$175k, which is what the pension will be worth if she lives 20 years after FRA.
That sure is good news.
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Old 04-14-2017, 04:26 AM   #86
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Originally Posted by Alan View Post
It feels like opening a suitcase and finding ~$175k, which is what the pension will be worth if she lives 20 years after FRA.
Found money is always nice.
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Old 04-14-2017, 07:28 AM   #87
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Originally Posted by Niuatoputapu View Post
Similar to us. I answered more than 5% because that is our plan for age 62-69. Then after I start SS at age 70, our withdrawal rates will be equal the RMDs of our tax-deferred pot. Enough flexibility to easily tighten the belt if the market tanks.
ReWahoo, RobLJ, Niuatoputapu....you're my heroes because I'm in the same boat and often wondered if I was crazy taking a high WR early in retirement knowing it would dip to around 1-2% at 70. Thank you for sharing your info.
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Old 04-14-2017, 08:01 AM   #88
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Originally Posted by Alan View Post
Just a couple of days ago I discovered that my wife is entitled to UK SS (Old Age Pension - OAP) even though she is under the 10 year minimum of contributions. Stupid really, but I'd never re-visited the question after major changes to the scheme in the decades since we'd left. As you know each person gets an OAP based solely on their own contributions and a spouse does not inherit any OAP when their partner dies. But these days people in full time education get credits, and those who leave work to raise children get credits while the children are below school age. Turns out that she actually has 20 years credit, including 2 years working part time between age 16 and 18 at High School, 4 years at university, 7 years until the youngest started school and 7 years working. We plan on buying 6 years past credit (most you can buy) and then doing 4 more years of voluntary contributions until she reaches FRA making a total of 30 years.

It feels like opening a suitcase and finding ~$175k, which is what the pension will be worth if she lives 20 years after FRA.
I think a spouse will get something as long as that person is over 45 and under pension age, and NI contributions were paid by late husband or wife.

https://www.gov.uk/bereavement-allowance/eligibility
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Old 04-14-2017, 08:25 AM   #89
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I think a spouse will get something as long as that person is over 45 and under pension age, and NI contributions were paid by late husband or wife.

https://www.gov.uk/bereavement-allowance/eligibility
It's not very much if anything at all and I hope I live another 4 years meaning she will be above pension age. (I expect it is means tested and she is not going to be hurting by losing my OAP)
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Withdrawal Rate: your personal comfort zone.
Old 04-14-2017, 09:52 AM   #90
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Withdrawal Rate: your personal comfort zone.

I started retirement thinking 4.5% using the Trinity info and other info that was in A Random Walk Down Wallstreet and set up my funds to provide that the first 5 years. Four years in and I'm a little lower than that percentage.
Next year I will have unfettered access to the IRA and may bump the spending a bit. I've not been depriving myself of anything, but I have a few things I'd like to do before I get too old.
I think a 5 to 5.5% withdraw will be very safe considering SS is now less than a dozen years away. Fidelitys planner says even higher has a good chance of lasting longer than I really believe I'll live.
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Old 04-14-2017, 10:12 AM   #91
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I look at it this way. If my investments just kept up with inflation, I should be able to take out 3.33% yearly for a 30 yr time period.
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Old 04-14-2017, 10:39 AM   #92
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What's the Trinity info? And why it's important to withdrawal rate?
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Old 04-14-2017, 11:17 AM   #93
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But these days people in full time education get credits, and those who leave work to raise children get credits while the children are below school age. Turns out that she actually has 20 years credit, including 2 years working part time between age 16 and 18 at High School, 4 years at university, 7 years until the youngest started school and 7 years working. We plan on buying 6 years past credit (most you can buy) and then doing 4 more years of voluntary contributions until she reaches FRA making a total of 30 years.

It feels like opening a suitcase and finding ~$175k, which is what the pension will be worth if she lives 20 years after FRA.
I got 2 years of free contributions for being at sixth form college between ages 16 and 18 and HMRC sent me notices to make voluntary contributions at university because I was in full time education. But I didn't have much money so I ignored them. I now have almost 35 years and calculate that my total lifetime contributions has been 7000 pounds....and for that I'll get an index linked pension that might be 10000 pound a year by there time I claim it in 2028.
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Old 04-14-2017, 11:30 AM   #94
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What's the Trinity info? And why it's important to withdrawal rate?
https://en.m.wikipedia.org/wiki/Trinity_study

Withdraw 4% from your starting portfolio and each year increase that $ amount by inflation. The % each year is measured from that initial sum, not the starting value of your ongoing portfolio each year.
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Old 04-14-2017, 11:48 AM   #95
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Curious. When you say you add SS to your spendable assets how are you calculating this? Are you capitalizing the flow over your "planned life expectancy"?
From my original post:
Quote:
We don't use SWR's but just check our solvency once a year and adjust as necessary.
Our formula...
Add Social Security to our spendable assets divided by 12 (current planned life expectancy)
If we spent more than that last year, we cut back, if we spent less we're ok. So far, for the past twenty years, we've been okay.
Basically at age 80, it's easier to look ahead... basing the "lasting power" on a finite number.

To over simplify... an example... (not our numbers but just to put a $$$ value on the plan.)
Spendable assets... $500,000 divided by 10 years = $50,000/yr. plus SS of $25,000/yr = $75,000 yr.

Since we actually spend a small faction fraction of that, we take another look every year to see if we're still safe. In fact, at our current rate, we'd be safe well into our mid to late 90's. Included in our planning is some nursing home insurance, as well as the value of our house, as a Medicaid "safe" shelter.
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Old 04-14-2017, 12:04 PM   #96
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I understand. So you will have a larger legacy?
Yeah, don't really see any way around it. Will also do more charitable as it grows. Have 6 grandchildren and it would be nice to help them avoid college debt. Both DS and DD are doing well, don't really need the inheritance but I'm sure they'd make good use of it. We are trying to whittle away at it though.
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Old 04-14-2017, 03:58 PM   #97
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I got 2 years of free contributions for being at sixth form college between ages 16 and 18 and HMRC sent me notices to make voluntary contributions at university because I was in full time education. But I didn't have much money so I ignored them. I now have almost 35 years and calculate that my total lifetime contributions has been 7000 pounds....and for that I'll get an index linked pension that might be 10000 pound a year by there time I claim it in 2028.
I think max benefit is now 30. My husband gets roughly GBP 160 per week, about $800 per month. Not quite $10k per year. But we stopped contributing last year by April 2016.
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Old 04-14-2017, 06:07 PM   #98
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I think max benefit is now 30. My husband gets roughly GBP 160 per week, about $800 per month. Not quite $10k per year. But we stopped contributing last year by April 2016.
To get the full UK flat rate pension you now need 35 years of contributions and it's currently £8k/year.
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Old 04-14-2017, 07:15 PM   #99
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To get the full UK flat rate pension you now need 35 years of contributions and it's currently £8k/year.
You are correct on the 35 years. I'm surprised my husband got above the max pension rate this year of GBP 159.5, I think his protected pension or whatever it's called is only GBP 1.45 over his U.K. State pension, so that means he must have gotten the max UK state pension. But I thought they did send a letter to say he has 30 years.
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Old 04-14-2017, 08:27 PM   #100
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You are correct on the 35 years. I'm surprised my husband got above the max pension rate this year of GBP 159.5, I think his protected pension or whatever it's called is only GBP 1.45 over his U.K. State pension, so that means he must have gotten the max UK state pension. But I thought they did send a letter to say he has 30 years.
The flat rate only applies to men born after 1951 and there are a number of factors that go into the calculation. Anyone retiring now with at least 35 years of contributions will get £155 per week. It's really a pretty poor benefit. My US SS will get WEPed as I only have 18 years of FICA payments, but it will still be considerably more than the UK state pension.
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