2022 Withdrawal Rates?

[Dtail]

FIREcalc is based strictly on US market history and a very long period of it containing all sorts of difficult financial conditions along with the good times, so I’m not sure why you consider it optimistic.

Note - there are no investment return assumptions.

+1
Perhaps it is seen as optimistic vs. a few other calculators which use Monte Carlo simulations, which by default are more conservative.

 

[retire2020]

3.9% WR at end of Dec to fund 2023 expenses.

 

[street]

Withdrawal Rate for 2022

This morning I finished up some of the numbers I like to do once a year. My WR was 1% this year and was thinking it would have been a larger percent.

The 1% was all for charity and money we gave in gifting this past year. We actually would have had a negative WR for the year. I have had this happen once before since I retired.

My gifting and charity for 2023 will be less and will be spending that money on us instead this year.

Just wondering what others have had for the year.

 

[braumeister]

@street: We already had an active thread on this topic, so I moved yours here.

 

[W2R]

Just my RMDs, which came to 0.38% this year since most of my nestegg is in taxable accounts that are not subject to RMD requirements.

I really didn't want or need any more money than that in 2022. Maybe that's a normal part of the aging process? I have no idea. Maybe it's due to "age 70 SS" kicking in four years ago. Whatever. All I know is that I'm happy and felt no need for more income this past year.

 

[pacergal]

For you folks living primarily on SS/pension with super low WRs (or negative in some cases), how do you even view your portfolios? CAPX, legacy, long term care insurance bucket? It would seem like WR here would effectively be immaterial?

I Never have a 0% WD, as I have a small inherited IRA.
With pension and SS, we do not wd for yearly budget. In the 6 years retired, the few wd we have done were for the kids!(wedding, house, unexpected high medical bills, unfortunate divorce that went beyond crazy due to the other party)

We look at our savings as our unforseen medical /long term care bucket, for legacy, and for totally over the top vacations (if we so desire) that our regular secure income may not provide.

We are so very thankful for what we have.

 

[street]

@street: We already had an active thread on this topic, so I moved yours here.

Darn, thank YOU Sir. I'm old and slow on the draw.

 

[NW-Bound]

Mine is a bit more or a bit less than 1% WR, depending on whether I use the stash balance at the beginning of year or the end of year to compute the WR. And this is after paying quite a bit for taxes on Roth conversion, gift/charity donations, and travel.

 

[ER Eddie]

1.9%.

 

[Livefree]

Ours was 2.5% for 2022. I started social security in July, and the wife will take hers next year, so the percentage should drop going forward

 

[Reese]

2022 wr = 1.9%

 

[RobLJ]

We withdraw about 5%, but spend about 3.5%. The overage goes into a taxable brokerage fund for emergencies, big spends, old age which is now about 125k, which lessens anxiety quite a bit.
The plan has been to withdraw up to the 12% tax line, but I'll turn 65 in May and am not taking SS, so I'm trying to figure out whether to delay and draw down 403b/IRAs or take at FWA, although I don't think it's a mortal sin to dip into the 20% tax line. I'm having trouble convincing the DW that we can spend 1/3 more per year than we do, although we're just starting to travel again (drove to Penn from West Coast in Sept for her niece's wedding), so taking SS at FWA might act as a spending prod. (Or might not.)


The withdrawal % assuming we both are withdrawing SS (DW is 4 years younger) and continue spending as now is eye-opening.

 

[COcheesehead]

We withdraw about 5%, but spend about 3.5%. The overage goes into a taxable brokerage fund for emergencies, big spends, old age which is now about 125k, which lessens anxiety quite a bit.
The plan has been to withdraw up to the 12% tax line, but I'll turn 65 in May and am not taking SS, so I'm trying to figure out whether to delay and draw down 403b/IRAs or take at FWA, although I don't think it's a mortal sin to dip into the 20% tax line. I'm having trouble convincing the DW that we can spend 1/3 more per year than we do, although we're just starting to travel again (drove to Penn from West Coast in Sept for her niece's wedding), so taking SS at FWA might act as a spending prod. (Or might not.)


The withdrawal % assuming we both are withdrawing SS (DW is 4 years younger) and continue spending as now is eye-opening.

Your withdrawal is 3.5% because you are holding onto the extra 1.5%.

 

[RobLJ]

Your withdrawal is 3.5% because you are holding onto the extra 1.5%.

Yes, I agree.

However, it is always possible we might spend the 5%, as we did when we installed solar back in 2019 (well, even then we didn't spend 5.5%). It is a sleight of hand.

i originally planned withdrawing 5.5-7% until SS FWA, but then the stock market did better than I planned, as well as spending was less. I was a lot more tense back in 2015 though when I semiretired at 57.

 

[REWahoo]

Our WD for 2022 was 2.5% of our 1/1/22 portfolio amount, 2.7% of our 12/31/22 portfolio amount. For you FIREcalc purists, it was 3.5% of our initial portfolio amount when we retired in 2005. Our combined RMD percentage was 4.1%

 

[audreyh1]

Our WD for 2022 was 2.5% of our 1/1/22 portfolio amount, 2.7% of our 12/31/22 portfolio amount. For you FIREcalc purists, it was 3.5% of our initial portfolio amount when we retired in 2005. Our combined RMD percentage was 4.1%

You may be the only FIREcalc purist here!

Well technically I am too, it’s just that I use the % remaining portfolio value method which is one of the alternative withdrawal methods modeled by FIREcalc.

It’s funny seeing folks comparing their withdrawal/spending to their year end portfolio value rather than the beginning portfolio value.

 

[RobLJ]

Good point on beginning portflio value; I was just too lazy to look at Jan 1, 2022. From that, it was 4.8% (or 3.3% based on actual spending).

 

[SecondCor521]

Our WD for 2022 was 2.5% of our 1/1/22 portfolio amount, 2.7% of our 12/31/22 portfolio amount. For you FIREcalc purists, it was 3.5% of our initial portfolio amount when we retired in 2005. Our combined RMD percentage was 4.1%

I would think a FIREcalc purist would also adjust spending for historical inflation between 2005 and 2022.

Technically my FIRE plan says to follow FIREcalc at the historically safe WR given my inputs but allow for a payout period reset ("retire again and again") each year. But since I don't spend that much anyway, it's really more of a "try to spend something closer to X% usefully" than "try to remain under X%".

 

[audreyh1]

I would think a FIREcalc purist would also adjust spending for historical inflation between 2005 and 2022.

I assumed that REWahoo did exactly that.

 

[SecondCor521]

I assumed that REWahoo did exactly that.

If so, I'm sincerely impressed by both his adjustment and your assumption.

 

[audreyh1]

If so, I'm sincerely impressed by both his adjustment and your assumption.

Well he could have inflation adjusted his starting portfolio value.

 

[REWahoo]

I made no attempt to adjust for inflation, but had I done so my withdrawal rate from my initial portfolio would be in the neighborhood of 4.8%.

I offer no assurances as to the accuracy of this number. Please note my sig line.

 

[audreyh1]

I made no attempt to adjust for inflation, but had I done so my withdrawal rate from my initial portfolio would be in the neighborhood of 4.8%.

I offer no assurances as to the accuracy of this number. Please note my sig line.

Since you made the statement “FIREcalc purist” I assumed that you had.

 

[REWahoo]

Since you made the statement “FIREcalc purist” I assumed that you had.

My bad.

Like that "objects may be closer than they appear" statement on your side mirror, I may claim to be more of a purist than I actually am.

 

[nobody]

0.8%, I have spending issues