IMO you're good.
We're planning to eat into "capital" (over interest) in 2-3 years when my half-time online contract runs out and DW retires (I'm 58; DW is 54). The SWR then will be 5.5-6% but only until I reach full retirement age/SS, when it will decrease to 3.5-4% and then lower when DW hits full retirement age. I can claim SS early in the event of a huge market event.
I'm planning to draw a similar amount 80-90k but off a current portfolio of 1.9 million.
And see pb4uski's post above on your SWR for explanation.
I'm skating on far thinner ice, but it seems fine, since we can cut back considerably if needed. (DW just paid off the remaining--rather small--housenote since a 3.25% return seems better than .1% in savings and there is still considerable savings/cash.)
We're planning to eat into "capital" (over interest) in 2-3 years when my half-time online contract runs out and DW retires (I'm 58; DW is 54). The SWR then will be 5.5-6% but only until I reach full retirement age/SS, when it will decrease to 3.5-4% and then lower when DW hits full retirement age. I can claim SS early in the event of a huge market event.
I'm planning to draw a similar amount 80-90k but off a current portfolio of 1.9 million.
And see pb4uski's post above on your SWR for explanation.
I'm skating on far thinner ice, but it seems fine, since we can cut back considerably if needed. (DW just paid off the remaining--rather small--housenote since a 3.25% return seems better than .1% in savings and there is still considerable savings/cash.)
I'm not sure if decumulate is a word or if there's another word I should use!
Anyway, I am interested to know if there are early retirees who are consciously planning to eat into their capital or who are already eating into their capital. Does that make you feel nervous? How have you set your portfolio up to deal with that?
Our situation is that we are early 50's (52 & 54) and about to stop work (three months). We will have around $2.5 million of invest-able funds and once we hit 60 should have enough income from pension schemes to meet the vast majority of our needs. However, until then the savings are pretty much all we have.
I've set up the portfolio so that it should throw off around $50,000 per year in income (dividends and interest) which means are remaining expenses will need to be met from capital (we estimate our annual expenses around $80-90k per annum).
We will be keeping around $500k in cash or secured funds (i.e. 6 years) means the rest we will not need to touch.....
....but after year of saving it still makes me nervous to start digging into those hard earned pennies.
What's your setup and how do your deal with the psychology of spening your stash?
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