All but the most unreasonable folks* seem to agree that some form of variable withdrawals ought to either a) allow a somewhat higher withdrawal rate, or b) take the Canonical 4% and enjoy a bit more margin of safety.
The frequency with which one adjusts their draw based on market returns probably matters as well. One could let things ride until one morning when they noticed that their portfolio balance had declined by, say, 91%, and then do a bit of belt-tightening, or one could adjust their draw annually as modeled by the more reknowned Post-Trinity SWR Theorists Gummy, SG, ESRBob, and most recently, Daddy-O.
I should think that at this point the more astute readers are probably wondering, "...but I wonder what Cb's planning to do?" That's an excellent question, one I'll answer now:
My plan (as of 10:20 last night) is to retire** with a stash that FIREcalc says is 100% safe for 55 years. But we'll diversify much more broadly (heavy equity, Int'l, value, TIPS, dash of PCRIX) as we roll out from our pretty restrictive 401K's. Then we'll set up a withdrawal scheme based on SG's body of work, figuring on drawing 3% fixed plus 1% of portfolio balance annually.
At this point I think we'll do 2 draws annually, my reasoning being that we stand to capture the extra $37 per year by letting half our draw ride in the aforementioned portfolio rather than stashing it under the mattress, and I think we ought to benefit slightly (no idea how to compute this, so we'll call it another $37, OK?) from adjusting our burn rate every six months rather than 12. (more frequent incorporation of feedback can only help, right?)
That is all.
Cb
*by which I do not mean to single out Nords
** by which I mean I'm quitting after another 9.5 days of the 3-day schedule I've been on since March, while Momma continues to toil away at the soap factory, allowing us a -0.3% WR until such time as she gets fed up and quits too.
The frequency with which one adjusts their draw based on market returns probably matters as well. One could let things ride until one morning when they noticed that their portfolio balance had declined by, say, 91%, and then do a bit of belt-tightening, or one could adjust their draw annually as modeled by the more reknowned Post-Trinity SWR Theorists Gummy, SG, ESRBob, and most recently, Daddy-O.
I should think that at this point the more astute readers are probably wondering, "...but I wonder what Cb's planning to do?" That's an excellent question, one I'll answer now:
My plan (as of 10:20 last night) is to retire** with a stash that FIREcalc says is 100% safe for 55 years. But we'll diversify much more broadly (heavy equity, Int'l, value, TIPS, dash of PCRIX) as we roll out from our pretty restrictive 401K's. Then we'll set up a withdrawal scheme based on SG's body of work, figuring on drawing 3% fixed plus 1% of portfolio balance annually.
At this point I think we'll do 2 draws annually, my reasoning being that we stand to capture the extra $37 per year by letting half our draw ride in the aforementioned portfolio rather than stashing it under the mattress, and I think we ought to benefit slightly (no idea how to compute this, so we'll call it another $37, OK?) from adjusting our burn rate every six months rather than 12. (more frequent incorporation of feedback can only help, right?)
That is all.
Cb
*by which I do not mean to single out Nords
** by which I mean I'm quitting after another 9.5 days of the 3-day schedule I've been on since March, while Momma continues to toil away at the soap factory, allowing us a -0.3% WR until such time as she gets fed up and quits too.