Vincenzo Corleone
Full time employment: Posting here.
- Joined
- Jul 20, 2005
- Messages
- 617
I'm trying to get a handle on what WR I should use given the constant % of Y/E portfolio balance withdrawal strategy. I'm 53 and my wife is 55. I'm retired, my wife will be retiring in two years. I'm planning for a 40 year time horizon. We will have no heirs, so no desire to leave a legacy.
We have approximately 50X current expenses. My wife will get a pension when she retires that covers about 25% of our current expenses. My wife will also become eligible for retiree healthcare next year for both her and me. Per opensocialsecurity.com's recommendation, I'll be taking SS at 62 and my wife at 70. I got our benefit amounts from the SSA. Given the pension and both SS amounts, our current expenses would be completely covered - although I admit that I'm not even sure that's a valid observation given it's 9 years until I take my SS and 15 years until my wife takes SS. Although our AA is conservative at the moment, in general I plan on maintaining a 70/30 AA. Given the following options, which WR do you advise we use and why:
We have approximately 50X current expenses. My wife will get a pension when she retires that covers about 25% of our current expenses. My wife will also become eligible for retiree healthcare next year for both her and me. Per opensocialsecurity.com's recommendation, I'll be taking SS at 62 and my wife at 70. I got our benefit amounts from the SSA. Given the pension and both SS amounts, our current expenses would be completely covered - although I admit that I'm not even sure that's a valid observation given it's 9 years until I take my SS and 15 years until my wife takes SS. Although our AA is conservative at the moment, in general I plan on maintaining a 70/30 AA. Given the following options, which WR do you advise we use and why:
- A constant WR of 3% + pension (but not counting SS) which will allow approximately 60% of our income to be allocated to discretionary spending. If the market tanks 70% the day before we're both retired (given the 70/30 AA and assuming our fixed income allocation remains the same), our total income would still cover our current standard of living.
- A constant WR of 3.5% + pension (but not counting SS) which will allow approximately 63% of our income to be allocated to discretionary spending. If the market tanks 80% the day before we're both retired (given the 70/30 AA and assuming our fixed income allocation remains the same), our total income would still cover our current standard of living.
- A constant WR of 4% + pension (but not counting SS) which will allow approximately 64% of our income to be allocated to discretionary spending. If the market tanks 90% the day before we're both retired (given the 70/30 AA and assuming our fixed income allocation remains the same), our total income would still cover our current standard of living.
- A constant WR of 4.5% + pension (but not counting SS) which will allow approximately 66% of our income to be allocated to discretionary spending. If the market tanks 90% the day before we're both retired (given the 70/30 AA and assuming our fixed income allocation remains the same), our total income would still cover our current standard of living.
- Some other constant WR.
- This is a silly question.
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