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What do you guys feels is a safe success rate?
I know ideal is 100% , but realistically whats considered a solid %?
this is the site: http://www.firecalc.com/
thanks
That is up to you. I am happy with any scenario that hits in the 90-95% range or higher.
There is another way of looking at this. You make a general prediction of safe withdrawal at the start or before retirement. Within a few years you will have a more precise prediction since investment returns during the first few years of retirement are very important. In my case, I looked at 4% withdrawal amounts about 3 years before I retired. After a couple of years in retirement, my portfolio had grow so well that the 4% number was almost twice the size I initially predicted. I got lucky. Your luck could go the other direction and you might need to think about cutting back on expenses if your investment returns are poor.
That is an awesome site and calculator. As for what I feel would be a good percentage for us would be as jrkliny says for him 90 to 95% is easily a comfortable result. Playing with the numbers and making it hit 80% is also something that can be okay. Just know that the adjustments you make that can make that result go is your spending and what you have saved.
Mathjak pointed out he prefers the 100% mark and yes that is important. But let's toss a couple of small points I have in the adjustment of that.
That calculator will take and run your numbers against good and bad times. The point of the exercise is to keep the graph from dropping too low.
You enter your target spending and that is where your adjustments will come from (if you are within 2-3 years or in retirement) Beyond that you have other options like saving more, increases in pension, SS options and the like. Within that target range <3 years or retired your savings is pretty much set. Pensions if any are set. Savings have a track record that you have and can keep but you might adjust your ratio equity to bonds so an assumption of earnings is called for. So to make those percentages go up or down you are only adjusting your spending level. The one on the first tab. Adjust it up and your percentage goes down. Tighten your belt and spend less. Your percentage will go up.
My thoughts on how all of this works is I will enjoy what I can as I can but still live within a set budget. If my investments go lower well I will curb spending some. If they recover well I will have steak and lobster to celebrate. The calculator is really a guide and a way of gaging where you are and where you might be heading. You should probably run those numbers once a year or so to make adjustments in the course.
Just my take. Math I wish you would come back.
Everyone speak up hear and ask him to come back. He is as smart a person on finance as I know. He needs to be here.
I guess that really depends on how locked in you are to the spending rates you outline. If your preference would be a spending rate of $80k/yr, but you could easily get away with spending $50-60k/yr if the market has a couple of down years early on I'd be fine with 70-80%. If you are going to need to spend every dime to live the lifestyle you need then I would want closer to 90-95%. Another factor, especially for those retiring closer to normal ages, which I would count as 50s-60s is your SS income. Those models aren't assuming an annuity that could cover as much as 50% of your needed income 10-15 years in.
I take a look at 100% but actually use the 90% - it's good to see how far one is from the other, but realistically I'm okay with 90%. I have a statistics background and I know how much more it takes to get to 100% and I want to live just a LITTLE bit NOW too!
I guess that really depends on how locked in you are to the spending rates you outline. If your preference would be a spending rate of $80k/yr, but you could easily get away with spending $50-60k/yr if the market has a couple of down years early on I'd be fine with 70-80%. If you are going to need to spend every dime to live the lifestyle you need then I would want closer to 90-95%. Another factor, especially for those retiring closer to normal ages, which I would count as 50s-60s is your SS income. Those models aren't assuming an annuity that could cover as much as 50% of your needed income 10-15 years in.
Yeah, Mine says 93%..I have my SS starting to pay me at age 70 and my spending is actually pretty accurate at about 65K pre tax which should leave me at like 45K after tax
That's one of the nice features of Firecalc. You can START spending at whatever success rate you want, then go from there. I PLAN to start at barely 100%, which is still more than I require for normal, comfortable living without impinging on my accustomed lifestyle. If that looks fine after a few or two years, I will rerun and see where I am.
My plan is to use most of my principle to enjoy life. The only way my heirs will get a lot is if I die unexpectedly before my planned expiration date!
My plan is to have most of my wealth pass along to various heirs and charities.
Once I die, my problems are over. My heirs money problems will just begin -- they will have to figure out what they are going to do with their substantial inheritance.
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