* I recently retired and am living entirely off my savings. I’m trying to figure out how to best withdraw my money each year, which seems to depend on factors that have a large amount of uncertainty. There are several articles that suggest spending decreases between 0.5 and 2% per year in retirement, depending on the level of spending of the retiree. However, these are aggregate amounts. I’m not sure anyone actually follows this curve since almost everyone will have unexpected and periodic expenses (such as buying a new car every 10 or so years). At the same time, SWRs depend on future market returns and can vary by a factor of more than 2.5, depending on what a portfolio does.
My question is this: how much does your spending vary year to year? Do you have a strategy for increasing or decreasing your spending each year that takes into account market returns?
My question is this: how much does your spending vary year to year? Do you have a strategy for increasing or decreasing your spending each year that takes into account market returns?