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WR pre-pension and SS
Old 04-07-2014, 06:06 PM   #1
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WR pre-pension and SS

Just curious what Withdrawal Rate ER folks are using before their pension if applicable and social security starts. The reason I am asking the question and my details follow:

I ESR'd back in 2007 with a plan to work part time. My business went well and fortunately / unfortunately grew to produce more than we needed each year so technically I failed at ESR for the last seven years since our WR was negative. I did manage to keep the work to an average of 18hrs per week but concentrated to the colder months during the school year so that I was free whenever the kids were out of school. I just turned 50 and have had enough again. It in many ways is what I always wanted out of work but I am ready to be free of w*rk. I hope to find my customers someone else within the next year and fully ER within a year or so allowing more time for the volunter gigs we have started.

We can definitely get by on 4% at that point as the budget has lots of padding. At 55 our pensions kick in and that would drop the WR a good bit. If we take SS at 62 our projected WR with the pensions will be about 1% going forward.

We have two homes now both paid for and expenses accounted for in the budget. I have tracked all expenses for the last 28 years so I am very comfortable in our budget estimates. We do plan to downsize to one home in the next ten years and that would drop our WR to .5% or less once SS starts.

So back to my questions is 4% for four years then much less a safe withdrawal rate for a planned 44 year retirement? That puts us to 95 years old.
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Old 04-07-2014, 06:17 PM   #2
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I don't get it.

Unless your goal is to leave a large estate to your kids or charity (an OK option, but not stated above), why not keep the 4% (or even 3%) withdrawal rate rather than dropping toward 0.5%?

The money is yours to spend, enjoy it.
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Old 04-07-2014, 08:20 PM   #3
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Sounds like you have a good belt AND suspenders!
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Old 04-07-2014, 08:24 PM   #4
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You can enter your income stream timing into FIRECalc and get a safe withdrawal amount from it. You can definitely exceed 4% for the first few years and still hit 100% success. Especially if you're down at 1% long term.

I, and a few others here, are at 6% or more for a few years. I have a pension in a year or two, SS in 10 and 15 years, and a kid with college expenses now. No way to hit 4% with that. I put it all into FIRECalc and came out fine, >4% early, <4% later. Just keep in mind that you want to be a bit conservative, like a big cash bucket, so that a market drop when you're withdrawing 6%+ doesn't kill you.
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Old 04-07-2014, 09:12 PM   #5
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When I ER'ed I had an immediate 3 small pensions with another 4 streams of pensions / SS between the 2 of us due over the first 15 years of retirement. I didn't look to any SWR % but put all the info into FIRECALC and a couple of other calculators, with my planned expenses, and checked on probabilities of success.

The projections are that I draw down a lot more in the early years before the extra pensions start coming. 7 years to the first, then a year to the next, then 4 years and then 3 years.

3 of the "pensions" are US SS for DW and myself, plus UK SS for myself.
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
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Old 04-07-2014, 09:21 PM   #6
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Originally Posted by fisherman View Post
....So back to my questions is 4% for four years then much less a safe withdrawal rate for a planned 44 year retirement? That puts us to 95 years old.
You're fine. Quit fretting and enjoy your retirement.
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 65/35/0 AA TBD
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