When "experts" talk about the 4% SWR, are there some assumptions they make about taxes?
It seems to me there are enormous differences depending on (among other things) the tax rates in the place you live, the basis in your taxable assets (and therefore the capital gains taxes you will have to pay to "use" your assets), the mix between taxable and pre-tax accounts (other than Roth, taxed as ordinary income when you use the money), etc. So your 4% could turn into 2.5%, or whatever?
Or is the idea that the 4% is just a number for what you can "safely" withdraw each year, and then taxes is just one of the expenses you would have to pay from that 4% (along with advisor fees, if you have an advisor, and food, and insurance, travel, etc.).
I assume that is the idea. And if it is, the 4% seems not very useful unless it comes along with some tax projections. Because otherwise the answer is 4% minus X -- and the X is a black box.
It seems to me there are enormous differences depending on (among other things) the tax rates in the place you live, the basis in your taxable assets (and therefore the capital gains taxes you will have to pay to "use" your assets), the mix between taxable and pre-tax accounts (other than Roth, taxed as ordinary income when you use the money), etc. So your 4% could turn into 2.5%, or whatever?
Or is the idea that the 4% is just a number for what you can "safely" withdraw each year, and then taxes is just one of the expenses you would have to pay from that 4% (along with advisor fees, if you have an advisor, and food, and insurance, travel, etc.).
I assume that is the idea. And if it is, the 4% seems not very useful unless it comes along with some tax projections. Because otherwise the answer is 4% minus X -- and the X is a black box.
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