I guess it all depends on what you consider the reasons for your definition of SWR with regards to AA. I never thought of SWR as defined by necessary income, mainly I guess, because I never had the chance to use FI as RE. Or I should say never had the balls to. To me, SWR is a rate that you COULD use and sustain for your chosen interval. I see people here all the time refer to their “actual SWR” vs a redundant “safe SWR”.
My route, because of the pensions and large SS was always once fixed income exceeded expected expenses, both required and discretionary, then I would retire and the investments would be for added fun money and unexpected costs, due to inflation and health which are basically uncontrollable.. In my feeble mind, it never occured to me until maybe 10 years ago that living off a SWR was any kind of option, so the vast majority was tax deferred. I had to decide WHAT my living and spending standards were going to be, then adjust my retirement date to occur when that income was met and exceeded by my safety margin. I always refer to income as net taxes, not gross. (And that was part of the problem. I never considered any tax advantaged investments. I didn’t even know they existed)
When I was in my 30s or even 40s I never planned to retire once I could generate “x” income from investing. There were just too many unknown variables. Too much faith had to be placed on uncontrollable factors. I knew I didn’t know what Inwould need or want as income in my 60s and beyond. Life had to happen first, or a crapload of money had to come my way!
So I guess I consider that there really are two different SWRs; one where you actually always take out that rate and actually spend it all as income, and one where you CAN take out that amount, but don’t, just keeping track of the running “SWR TOTAL” & tapping it whenever you want. I mean this sincerely. My current working income is income. I don’t add in 4% of what my investments are, and say that’s part of my income. It is still in accumulation mode. DW is already collecting her pensions and SS and it is simply income, of which 75 % of it is invested.
When my retirement rolls around, in 575 days, it is because at that point my pension and investments will/should have reached the point that both of our pensions plus SS (regardless of when I actually take it) easily exceed all types of planned expenses, now that I am at an age and lifestyle that I am satisfied with. I’m just glad that turned out to be under $150k in todays dollars and not something like $200-250k, that I would need to work until I was 70 to reach. I mean, isn’t reaching what ever “level” of income/success you want part of the decision as when to retire? Assuming of course that you actually earn and save enough to meet whatever level you really wanted. It is ludicrous for me to want to live a $500k/yr lifestyle. I never have, and the opportunity never presented itself. I would never be a VP or wall street wiz. But my income & lifestyle fairly exceeds what I and my strata are used to, so I am satisfied.
The major difference now is that the amount invested at my age, is at the point where it fast approaches that it makes no sense to purposely only add to it. The time has comes to withdraw whenever I want, but only at a sustainable average rate, depleting the principal as it makes sense to do based on age and circumstances. If I die before I expect, the amount left is still sustainable for the same number of years for DW, or goes to heirs. I’d be dead, so wouldn’t care. I lived as I wanted. If by, say 90, and much of the savings is gone, as I see fit, which is dependent on what the fixed incomes are compared to expenses at that time, then all is good. Probably way too conservative, but I guess it is so ingrained in me that it would take enormous investments (to me, like 5-10M, not 1-2M) before I could comfortably not care about other income sources as required.
I could never be 100% equities because the swings don’t warrant the miniscule average gains. 60/30/10 is about the most I could go.
