Do you have a zero withdrawal rate?

[Rianne]

And if it's plenty for you, does it matter if it's less then zero one year or 5% another year? It doesn't...does it? I'd hate to see people think zero WR is somehow "better" and not enjoy things like a beautiful new kitchen. Zero will definitely leave more for your heirs but that's not the only way to roll.

I stated a similar situation BUT we do not have LTC insurance. I did not mention that. The portfolio may well be depleted if we're depending on LTC. And heirs get very little if any.

 

[wmc1000]

We "see" our portfolio as our LTC component. Retired with a mid 6 figure portfolio so never planned on it for normal living expenses. If it wildly grows beyond the "significantly below average" Fidelity projections then we will reevaluate our position and possibly spend the dividend/capital gain components down the line.

 

[ShokWaveRider]

Angry no, just thinking this is a pat yourself on the back type thread. Bolstered by your throw away comment that you didn't plan for it, it just happened that way.

Why does it even bother you enough to prompt such a comment. It is just a discussion subject, nothing more. Perhaps you are reading too much into it. Read posts, if you have anything to offer do so, if not move on.

 

[NW-Bound]

Apparently, there are many retirees with more money than they know how to spend. I wonder if Uncle Sam isn't contemplating a plan to take that unused money and throw it all in the pot. Hey, you don't use it you lose it, right? How are you going to miss it? You say it's for contingency? Fine, when you really need it, come tell us and we will see what we can do.

Darn, I'd better start reading the "Blow dough" thread again for ideas.

 

[Fireup2020]

Come December, I'll be at 0% WR (my first state pension should be deposited 01 Dec) - two pensions (military & state) plus VA disability cover ALL expenses with plenty of play money - but house is paid off, and we are exempt from property tax. Grateful for some of the good decisions I made once upon a time!

 

[DAYDREAMER]

Apparently, there are many retirees with more money than they know how to spend. I wonder if Uncle Sam isn't contemplating a plan to take that unused money and throw it all in the pot. Hey, you don't use it you lose it, right? How are you going to miss it? You say it's for contingency? Fine, when you really need it, come tell us and we will see what we can do.

Darn, I'd better start reading the "Blow dough" thread again for ideas.

What a way to spark the economy! If something like this ever happened, I'd spend like a mad man. I was always one to spend every second of my Sick leave, because it was a use it or lose it.

 

[kcowan]

+1. WR below 2%.

Same here and that year we bought a new car and a new condo (10 year amortized).

 

[ivinsfan]

Apparently, there are many retirees with more money than they know how to spend. I wonder if Uncle Sam isn't contemplating a plan to take that unused money and throw it all in the pot. Hey, you don't use it you lose it, right? How are you going to miss it? You say it's for contingency? Fine, when you really need it, come tell us and we will see what we can do.

Darn, I'd better start reading the "Blow dough" thread again for ideas.

We just need to be less subtle on the "OMY" threads...

 

[NW-Bound]

I was only half-joking.

Other nations already have negative interest rates to take money from bond holders. For stocks and other assets, they have wealth tax. They are too impatient to wait for capital gain tax, which does not work if these buy-and-holders simply do not sell. And what if they have no gains but losses in bad years? Wealth tax works in any market, bull or bear.

And the wealth tax can be levied on retirement funds too. Got to get to those guys now, even though they will be taxed when they die and the money passes to the heir. Need money now.

From Wikipedia:

A wealth tax (also called a capital tax or equity tax) is a levy on the total value of personal assets, including bank deposits, real estate, assets in insurance and pension plans, ownership of unincorporated businesses, financial securities, and personal trusts.

Note the inclusion of insurance and pension plans. Nothing escapes.

 

[SheitlQueen]

I've been retired 4 years and so far haven't touched my investments, income from SS and rental properties give me more income than I spend. That's going to change next year when I start doing a lot of traveling, but even then I'll probably only withdraw what I make in dividends.

 

[Nature Lover]

OP: @ 58, my pensions and non-portfolio income currently exceeds my regular/recurring expenses (including taxes). So a WR<=0% is more the norm. Larger, infrequent purchases (home improvements, new car, ...) and/or larger unexpected expenses would likely require some withdrawal...depends on the purchase/circumstance.

 

[SecondCor521]

I was only half-joking.

Other nations already have negative interest rates to take money from bond holders. For stocks and other assets, they have wealth tax. They are too impatient to wait for capital gain tax, which does not work if these buy-and-holders simply do not sell. And what if they have no gains but losses in bad years? Wealth tax works in any market, bull or bear.

And the wealth tax can be levied on retirement funds too. Got to get to those guys now, even though they will be taxed when they die and the money passes to the heir. Need money now.

From Wikipedia:



Note the inclusion of insurance and pension plans. Nothing escapes.

Not sure how serious / sarcastic / joking you are.

On a serious note, my understanding (and I'm no expert) is that a wealth tax is considered by many to be unconstitutional in the US. So to implement one here might require an amendment, which is no easy thing to do.

 

[scrabbler1]

I'm not old enough to claim SS or my frozen company pension, as I am only 56 and have been living off my taxable investments for the last ~11 years (as I wait for unfettered access to my rollover IRA, the third of my "reinforcements").

My WR is simply my expenses divided by my portfolio (all of it, not just the taxable part) and has been between 1.8% and 2.6% over the last 10 calendar years. Once I become eligible for SS and the pension, they alone might be enough to cover my expenses which will probably go down as I will be able to go Medicare, too, instead of the far costlier ACA plan I am on. That would give me a zero WR a defined by the OP.

 

[Floridatennisplayer]

I’m glad I asked. Lots of great information, ideas, and strategy people are using and the mindset behind them.

Very interesting to see how people are doing this part of retirement that I haven’t known much about.

 

[NW-Bound]

Not sure how serious / sarcastic / joking you are.

On a serious note, my understanding (and I'm no expert) is that a wealth tax is considered by many to be unconstitutional in the US. So to implement one here might require an amendment, which is no easy thing to do.

Occasionally, I may be sarcastic, but I am always joking, even on serious matters. I like to be irreverent.

Anyway, I was not aware of the constitutional aspect of the wealth tax, so take a quick look on the Web. There are opinions both ways. So, I don't know.

 

[NW-Bound]

I’m glad I asked. Lots of great information, ideas, and strategy people are using and the mindset behind them.

Very interesting to see how people are doing this part of retirement that I haven’t known much about.

Well, some people have plenty of pension in addition to SS, so they do not need to draw from their stash and like to watch it grow.

Some enjoy spending more than watching, so they blow the dough.

I have to withdraw to live on, and so I do. The only question is how much, and I play it by ear. It turns out that with the bull market, my stash grows while my needs diminish with time, so my WR drops. And it will drop more when I start SS. Not much of a strategy there, but just circumstance.

Any day now, when the market drops and my stash shrinks along with it, my WR will not be so low. Lots of unknown in life, and I will roll with it.

 

[ShokWaveRider]

So to clarify (as no one responded to my last post.), WR is based on all investable assets only, Before any Returns?

 

[RobbieB]

My WR is far from zero. In addition to all the interest and divis I spent I sold a hundred grand in equities this year. But somehow my net worth doesn't change -

 

[dtbach]

If you are at 0% WR then it seems you worked waaaaaayyy too long and could have retired much earlier.


Nothing to brag about IMHO. . .

 

[Floridatennisplayer]

So to clarify (as no one responded to my last post.), WR is based on all investable assets only, Before any Returns?

Well, from what I’ve read in this thread ........ lots of different definitions. Which is one of the reasons I asked. No wrong or right answers either. Just interesting conversations.

I was thinking and under the impression that a zero withdrawal rate meant not having to “touch” any of your portfolio at all. Dividends, interest, etc..... nothing. But that your income (SS, pension, annuity, job) covered your expenses.

Interesting area huh!

 

[Midpack]

Well, from what I’ve read in this thread ........ lots of different definitions. Which is one of the reasons I asked. No wrong or right answers either. Just interesting conversations.

I was thinking and under the impression that a zero withdrawal rate meant not having to “touch” any of your portfolio at all. Dividends, interest, etc..... nothing. But that your income (SS, pension, annuity, job) covered your expenses.

Interesting area huh!

If you bought an annuity, it's really not zero withdrawal - you just took your withdrawal in one lump sum up front. And maybe it's just me, but income from a job isn't part of retirement withdrawal. If it was, many of us were zero withdrawal while we were working...which doesn't mean anything.

 

[pb4uski]

If I took 26% of our nestegg and put it into a 2-year deferred payout annuity then the annuity benefits, SS and my small pension would be equal to our spending.

I'm not interested in doing that at all but an interesting exercise.

 

[Floridatennisplayer]

Anything from your portfolio is a withdrawal to me.

How can income from a job be a withdrawal? I never said it was a withdrawal.

I consider an annuity the same as a pension. Sure, you bought it, but that’s done.

 

[Midpack]

Anything from your portfolio is a withdrawal to me.

How can income from a job be a withdrawal? I never said it was a withdrawal.

I consider an annuity the same as a pension. Sure, you bought it, but that’s done.

Then almost everyone here can buy a zero withdrawal plan, so what's the point of the question?

I guess the question was who has (along with Soc Sec) a big pension and/or bought an annuity (a withdrawal from portfolio) that exceeds their projected spending? An very specific but odd question?

I never said income from a job was a withdrawal, that wasn't the point...but never mind. Now I remember your earlier posts.

 

[kgtest]

I think if you can look back 5 years after retirement, and you have more money than you started the game with...than you definitely 'WON' the game.

0%SWR is what my ole man calls "Overkill" which is ok. I am going to overkill it as well.