Article: Don’t cheat yourself with the 4% rule

[bobandsherry]

Always interesting to read alternative views. I'm sure some will agree, others disagree.

https://www.marketwatch.com/story/dont-cheat-yourself-with-the-4-rule-2018-05-04

For me, now 5 years retired I resemble some of the remarks. My nest egg is up 75% from value when I retired despite my spending has been more than the 4% with larger discretionary expense so we can enjoy travel while we are young. SS still years away but plan is we'll reduce our WR once SS begins to fill the wallet to cover expenses. I'm far from set it and forget it. I figure I'll still be 4% or less WR over the 30-40 year expense plan.

 

[qwerty3656]

I definitely plan on adjusting withdrawal based on pre-social security vs post-social security. I also think I will set up a "travel while you're able fund" and set aside an extra [100k?] to be spent on travel over the 1st [10 years?] of retirement.

 

[MichaelB]

The link in the OP is to a Marketwatch article asserting the “4% rule” leaves money on the table. It cites a 2015 essay by Michael Kitces which most surely has been discussed here previously and probably multiple times.

The rest of the article describes withdrawal situations that would be totally foreign or unacceptable to most forum members, such as not taking into consideration other income streams when calculating withdrawal rate.

 

[Time2]

Don't forget we have been in a good time for stock market returns.
Even though I have spent more than twice my living expenses, because of expensive tuition costs, my net worth is up $345k in 2-1/2 years of retirement. If I can get 25% of that for the next 20 years, I'll be thrilled.
i.e. If my net worth continues to grow while I'm making retirement withdrawals.

 

[ExFlyBoy5]

The link in the OP is to a Marketwatch article asserting the “4% rule” leaves money on the table. It cites a 2015 essay by Michael Kitces which most surely has been discussed here previously and probably multiple times.

The rest of the article describes withdrawal situations that would be totally foreign or unacceptable to most forum members, such as not taking into consideration other income streams when calculating withdrawal rate.

Thanks for the summation; "Marketwatch" tells me all I need to know.

Perhaps the forum can have a "Marketwatch Containment Area" like the COVID posts.

 

[bobandsherry]

Thanks for the summation; "Marketwatch" tells me all I need to know.



Perhaps the forum can have a "Marketwatch Containment Area" like the COVID posts.

Interesting that if there's a contrareon view posted there's a call to eradicate it. [emoji23] I find I like seeing both sides to any situation, keeps me better informed. I'll bet there is also more than one right answer too. [emoji106]

 

[ExFlyBoy5]

Interesting that if there's a contrareon view posted there's a call to eradicate it. [emoji23] I find I like seeing both sides to any situation, keeps me better informed. I'll bet there is also more than one right answer too. [emoji106]

Hey, I didn't say to eradicate anything; I merely mentioned a containment area and that was in jest. Marketwatch has turned into a clickbait site of the worse kind IMHO. This board is FULL of contrarian views and I don't think anyone has called those to be eradicated, either.

Something else I noticed. The published date of the article is 2019 yet there are comments from 2018. So, when DID they publish the article?

 

[MichaelB]

Interesting that if there's a contrareon view posted there's a call to eradicate it. [emoji23] I find I like seeing both sides to any situation, keeps me better informed. I'll bet there is also more than one right answer too. [emoji106]

Since you’re the OP you might share with the rest of us what exactly you find thoughtful about the article.

 

[Midpack]

More useless clickbait.

The 4% SWR "rule" is a planning tool (ROM how much to accumulate), not a withdrawal recommendation - it was never the latter per the original authors.

And I have yet to hear of anyone who's plan is to withdraw X% initial and inflation adjusted thereafter for 30+ years...

 

[Gumby]

More useless clickbait.

The 4% SWR "rule" is a planning tool (ROM how much to accumulate), not a withdrawal recommendation - it was never the latter per the original authors.

And I have yet to hear of anyone who's plan is to withdraw X% initial and inflation adjusted thereafter for 30+ years...

I have a very strict rule for withdrawal - the cube root of my current age times my initial portfolio balance. However, if a number 15 seed advances out of the first round in the NCAA basketball tournament, then I give myself a 0.5% bonus for that year. I make no reference to my actual portfolio balance or performance or to my spending needs. It's very comforting to take such a precise and scientific approach.

 

[ExFlyBoy5]

I have a very strict rule for withdrawal - the cube root of my current age times my initial portfolio balance However, if a number 15 seed advances out of the first round in the NCAA basketball tournament, then I give myself a 0.5% bonus for that year. I make no reference to my actual portfolio balance or performance or to my spending needs. It's very comforting to take such a precise and scientific approach.

Why so simple?

 

[Time2]

I have a very strict rule for withdrawal - the cube root of my current age times my initial portfolio balance. However, if a number 15 seed advances out of the first round in the NCAA basketball tournament, then I give myself a 0.5% bonus for that year. I make no reference to my actual portfolio balance or performance or to my spending needs. It's very comforting to take such a precise and scientific approach.

Basketball just isn't my thing, any way to work with Pickle ball?

 

[Out-to-Lunch]

The link in the OP is to a Marketwatch article asserting the “4% rule” leaves money on the table. It cites a 2015 essay by Michael Kitces which most surely has been discussed here previously and probably multiple times.

The rest of the article describes withdrawal situations that would be totally foreign or unacceptable to most forum members, such as not taking into consideration other income streams when calculating withdrawal rate.

+1. In addition, I am not sure they correctly understand what the conventional 4% rule even is:

Take the popularized “4% rule” as an example. It’s a rule of thumb that says you can withdraw 4% of your portfolio value each year in retirement without incurring a substantial risk of running out of money. Using this rule, for every $100,000 you have, you’d withdraw $4,000 a year.

 

[jimbee]

Interesting that if there's a contrareon view posted there's a call to eradicate it. [emoji23] I find I like seeing both sides to any situation, keeps me better informed. I'll bet there is also more than one right answer too. [emoji106]

Ok, now you made me look at the article. I read it, and I agree with the first comment by R. Micci, "Wow, this article basically said nothing." It didn't even characterize the "4% rule" correctly. Clickbait.

 

[EastWest Gal]

I’m not bothering to read the article, but based on your comment, can you believe they pay people to write this stuff?