I am some what new to the withdrawal rate aspects of ER, and have routinely found discussion and information from you folks as helpful. My homework most commonly says the 4% withdrawal rate as a starting point. But I've also seen lower higher and "just live off the interest and don't mess with the principal" theories. I'd be curious of your philosophies on this and how you've established your comfort zone for withdrawal.
My current thinking on the 4% rate is that it may be a little aggressive. It seems to assume that market performance can be predictable quite a while out, that your income producing potential from principal will gradually be depleted, and that you won't live to some extraordinarily long age. While the numbers seem to work out fine, these things cause me to worry about these withdrawal rate.
I'm 52 and still working, but in the process of projecting retirement expenses and incomes that say I can be set free from wage based work in the next 0 to 5 years. The touted 4% withdrawal rate puts me closer to the zero years left, but at this point might also cause a few too many sleepless nights afterwards.
Your thoughts are helpful.
My current thinking on the 4% rate is that it may be a little aggressive. It seems to assume that market performance can be predictable quite a while out, that your income producing potential from principal will gradually be depleted, and that you won't live to some extraordinarily long age. While the numbers seem to work out fine, these things cause me to worry about these withdrawal rate.
I'm 52 and still working, but in the process of projecting retirement expenses and incomes that say I can be set free from wage based work in the next 0 to 5 years. The touted 4% withdrawal rate puts me closer to the zero years left, but at this point might also cause a few too many sleepless nights afterwards.
Your thoughts are helpful.