Ready-4-ER-at-14
Full time employment: Posting here.
Hi, I've been slowly converting a bunch of individual stock holdings to an index based method as many here seem to do. My understanding that people then take out some value from that periodically and let the rest hopefully grow.
I have also observed that a total withdrawal rate somewhere between 3-4% is often used.
We have a couple years coming where the passive money should just about pay for for everything with a bit of a buffer in cash for the unexpected. Some of the holdings have appreciated in the last quarter and I want to take some out of the fund and just have the extra cash there too. What i am looking specifically at is in a Roth that can be tapped without any penalties or taxes.
Any idea roughly how to determine what withdrawing say 25% of the increase of a major index fund like SPY or DIA quarterly would relate to in a percentage withdrawal scenario historically? I would not tap it if it were flat or down.
There might be an old thread on this but if so I'm not sure of key words to search here. It certainly seems sustainable and obviously if the fund were up 2% a quarter it would be taking out around 2% annually. My gut reaction is that is about what it would be historically.
Thanks for a response and I'm hoping i won't have to type a bunch of stuff into excel to get an estimate.
I have also observed that a total withdrawal rate somewhere between 3-4% is often used.
We have a couple years coming where the passive money should just about pay for for everything with a bit of a buffer in cash for the unexpected. Some of the holdings have appreciated in the last quarter and I want to take some out of the fund and just have the extra cash there too. What i am looking specifically at is in a Roth that can be tapped without any penalties or taxes.
Any idea roughly how to determine what withdrawing say 25% of the increase of a major index fund like SPY or DIA quarterly would relate to in a percentage withdrawal scenario historically? I would not tap it if it were flat or down.
There might be an old thread on this but if so I'm not sure of key words to search here. It certainly seems sustainable and obviously if the fund were up 2% a quarter it would be taking out around 2% annually. My gut reaction is that is about what it would be historically.
Thanks for a response and I'm hoping i won't have to type a bunch of stuff into excel to get an estimate.