Flat spending rate

[JeKa]

I'm coming up on 7 years since FIRE.

My spending rate has been flat. I'm not talking flat percentage, but flat sum.

Meanwhile the value of assets are up over 80%, not even adding up the money I've withdrawn.

Or more accurately, I've mostly lived off dividends and the savings I had 7 years ago. I've not sold shares other than some minor numbers for tax loss harvesting.

So in the first year, my spending represented maybe 2% of total assets.

In 2020, with reduced spending from the pandemic, spending is less than 1% of asset value at the end of 2020 (market was down a lot around April and May and had gone up a lot by the end of the year).

In 2019, which was my highest spending year since RE (and also the highest spending year ever), it was 1.7% of total asset value at end of 2019.

So at about half way point in 2021, I would be on pace to spend less than 1.2% of my current assets, as of Friday.

In dollar terms, I've been at the same level, give or take maybe $10-15k?


It's not that I'm necessarily trying to LBMY. The first few years were tentative, uncertainty about living only on retirement assets, uncertainly about the market direction, which had already risen a lot in the 5-10 years before I FIRE'd, even accounting for the 2008 Financial Crisis.


But do I need to pick a higher withdrawal rate and stick to it no matter what?

A lot of folks seem to rebalance at the start of the year so they're selling their SWR calculated against their ending asset value at the end of the previous year?

I'm 60 so there would be SS to add to the spending in a couple of years and RMDs in no more than 10 years.

I am pulling just enough to stay in same tax bracket. Part of that is converted to a Roth. The more converted to a Roth the less I have to worry about the RMD down the road.

You still have a few years to convert so that the RMD doesn't bump the tax bracket any higher that necessary.

 

[audreyh1]

Over the past 5 years we’ve consistently upgraded our travel experience each year (better accommodations, better transportation, more custom/private tours, etc.) and so far it’s been well worth it.

 

[explanade]

Over the past 5 years we’ve consistently upgraded our travel experience each year (better accommodations, better transportation, more custom/private tours, etc.) and so far it’s been well worth it.

I have as well, with greater travel budgets.

This last trip, I used taxis and minimized buses, not just to spend more but avoid being in crowded situations.

Still old habits die hard, I kind of gulped at a €60 taxi but kept using them.

Still look at menu prices though spending more on meals isn’t that extravagant, though there’s obviously big markup on beer and wine.

 

[audreyh1]

Are you flying first class yet?

 

[explanade]

Business class. A lot of airlines have gotten rid of FC.

One time I flew it, it wasn't especially memorable.

I got to sit at FC lounge in London and order a custom omelet breakfast.

Bigger pod, further spaced apart from others.

 

[audreyh1]

Oops, that’s what I’m meant for international flights - business class.

 

[explanade]

Well the little market pullback on Monday didn't last long. Markets more than recovered and now my NW is at an all-time high.

Flying out Monday but that's an award ticket. Then another trip end of August (if they don't shut it down by then).

Maybe one more this year unless travel is shut down again.

 

[explanade]

The BTD threads seem to indicate that many ER members are looking to increase spending?