FANOFJESUS
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Variable 4%
variable 5% would have work to. As long as you can live with the swings in income.
Questioning the 4% plan in retirement
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Variable 4%
variable 5% would have work to. As long as you can live with the swings in income.
ychuck46
Recycles dryer sheets
I agree
Absolutely. While I always loved using FIREcalc before retirement to gauge my progress, using the 4% standard, I never intended to stay in that camp. Right now all in I am probably more like 1.5-2%, and we have a great life. I used the calculator mostly to make sure all the random scenarios totaled up to a 100% probability we would never run out of $.
Absolutely. While I always loved using FIREcalc before retirement to gauge my progress, using the 4% standard, I never intended to stay in that camp. Right now all in I am probably more like 1.5-2%, and we have a great life. I used the calculator mostly to make sure all the random scenarios totaled up to a 100% probability we would never run out of $.
Ha, saw this article which says 4.7% is the new number now.
https://www.investors.com/etfs-and-...t-rule-provides-retirement-income/?src=A00220
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It is very unlikely that the the young wife and I will ever voluntarily draw 4% from our portfolio (long term care expenses being a foreseeable exception). Currently, our draw is less than zero. Should overseas travel return to being a reasonable possibility, we may exceed zero, but even then 2% would be a real stretch.
SecondCor521
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
The gist of the (IMHO unclear) articles seems to be that Bengen says you can do 4.7%, and you can do 4.7% if you either (a) add other asset classes, and/or (b) assume that you're not retiring in 1968.
I watch them as well and totally agree with your sentiments. I think getting a charter captain license and renting for a time would be a good way to scratch the itch.
CRLLS
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Back when the 4% rule (William Bengen) was released, it was the first of its kind. Since the, the oft quoted Trinity Study essentially confirmed it. Since then many studys have been mad using different reference funds. Each has their own recommended percentage. In fact, WIlliam Bengen increased it to 4.5% in 2006. But honestly, he used different assets from his first paper. Various numbers now run from < 3% to well over 6%. So, I believe this is very much like Segal's Law: "A man with one watch knows what time it is, and a man with two watches could never be sure."
I would bet that none of us hold the exact same assets (note, this is different than AA) as was used in any of the studies. Pick a number and stay with it. Then adjust over time as necessary. Nobody can say with any certainty which number will take you to the finish line safely.
I would bet that none of us hold the exact same assets (note, this is different than AA) as was used in any of the studies. Pick a number and stay with it. Then adjust over time as necessary. Nobody can say with any certainty which number will take you to the finish line safely.
corn18
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How did anyone ever decide to retire before all these rules?
Jeez PB4USKI. Thanks alot! If I ever start another business I'm hiring you..
Good Luck!
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
+1
RetiredHappy
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Most people worked until they were no longer able to work and then worked on trying to make ends based on whatever income they had in retirement.
FANOFJESUS
Thinks s/he gets paid by the post
The 4% rule is really the 4.3% rule even in the first study he did.
Looking4Ward
Full time employment: Posting here.
Same here. Seven years ago and some years I've been as high as 8%. Still have roughly 45% more that I started with.
FANOFJESUS
Thinks s/he gets paid by the post
What do you guys think of this 5% withdrawal?
GravitySucks
Thinks s/he gets paid by the post
When I was recently retired and 55 years old I ran into an old timer (well into his 80s) Insurance / Finance guy. He told me I should stick closer to a 6% draw instead of the 7% he used to recommend to his older clients.
There was no science behind this, it just usually worked. Glad Bengen computed SAFEMAX.
Dtail
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
+1
The 7% thought process was a simple 10% average stock market return less an average 3% inflation.
No sequence of return risk concepts were factored in.
Major Tom
Thinks s/he gets paid by the post
Well yes, but you retired during a long bull market run, which has continued. High levels of withdrawal are easy in such conditions.
ncbill
Thinks s/he gets paid by the post
Wasn't 1966 the worst year to start a 30-year retirement?
A 1965 retiree saw annual inflation go from 2% to double digits (~14% max, IIRC) over the entire first half of their 30-year retirement.
So I worry about annual inflation rates steadily increasing, year-over-year, much more than current valuations.
One poster over on bogleheads retired back in the early 80s...his max SWR retiring that specific year is estimated to be over 10%!
Dtail
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
SecondCor521
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I think when I wrote 1968 I was just quoting from one of the articles linked in the article that was linked here.
When I enter my FIREcalc inputs and then stress test by solving for the highest spend that is 95% safe, the failures are nearly always in the late 1960s. And this is generally true for most sets of FIREcalc inputs I think, although start years in the Great Depression obviously can pop up as well.
I agree that inflation can be a FIRE killer or danger, but I think we understand it better than we did in the late 1960s, so I hope we have a better chance of avoiding a repeat of (or even a rhyme with) that kind of history.
What confuses me is that the OP referred to their property as part of their liquid assets, and that simply isn't the case. The condo could take months to settle following a contract. Or a storm could destroy the condo and leave them with no rental income or residence while insurance claims are settled.
When looking at their actual liquid assets, minus what they want to spend on a boat, they might have enough to maintain the boat; but what about healthcare, dental, or other basics?
At points in my life I entertained a similar ER, but it involved a much less expensive boat and much more economical locations compared to South Florida.
When looking at their actual liquid assets, minus what they want to spend on a boat, they might have enough to maintain the boat; but what about healthcare, dental, or other basics?
At points in my life I entertained a similar ER, but it involved a much less expensive boat and much more economical locations compared to South Florida.
Well. I decided around $250K instead of $400K will get me a boat I can live with. Regarding the townhouse, not condo, I'll probably list it next Spring. Don't see a problem selling it for top $ in South Florida. A townhouse 3 doors down sold in 1 week, last month. Healthcare , I have through a worldwide policy from the largest insurer in Colombia S.A.(Sura) I'm a perm resident of Colombia, also a US citizen. It cost me $150 a month and covers up to $100k per "incident" I have had it 4 yrs now, without a claim.
