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Old 04-23-2014, 10:55 PM
 
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Quote:
Originally Posted by kelly237 View Post
at about 65 and about $1700...
If I understand correctly, you plan to live from age 56 to 65 on your investment withdrawals? With or without tax liability?

edit to add: and after that, you plan to use your investment withdrawals to cover the $3600 annual shortfall in perpetuity?

Have you considered postponing retirement a few more years and running those numbers? I don't see they add up for a retirement as early as 56, without a pension.

Last edited by biscuitmom; 04-23-2014 at 11:11 PM..
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Old 04-23-2014, 11:08 PM
 
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Quote:
Originally Posted by biscuitmom View Post
If I understand correctly, you plan to live from age 56 to 65 on your investment of 580k? With or without tax liability?
If I understand the rule of thumb I should be able to take out 4% without touching prinicipal...
If f I can live off that til ss age ...then I should have ss and that 4%...

It's not laziness that makes me want to retire ..I have some charities & causes I could work with
much more if retired...

Tax Liability...Hummm...not sure..
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Old 04-23-2014, 11:13 PM
 
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Quote:
Originally Posted by augiedogie View Post
2000x12 is $24k a year. Ten years is 240K and that gets you to 66 when medicare and SS kick in. That still leaves you with about 300K. You might do a life expectancy analysis. Figure out how long you might live and take a look at that. Bottom line is, its all guess work.
Quote:
Originally Posted by biscuitmom View Post
The downside of your scenario is almost 1/2 her nest egg is gone before she reaches Medicare and SS FRA.
Not a pretty picture, and that's assuming she has no tax liability on the $24k.

Her investments might or might not outpace inflation, like you say that's guess work.
I thought the whole point in the 4% withdrawal rule of thumb is that it does not deplete your
investments because it is a rate that would not touch original investments..
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Old 04-23-2014, 11:18 PM
 
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SS amount is confusing...
I have a 10 year marriage from my 30's that could be used or a deceased husband's ss.
I plan to meet with SS soon to get specifics in my case..
Drawing on my own accord would be low because or all the child rearing years..
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Old 04-23-2014, 11:20 PM
 
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Quote:
Originally Posted by kelly237 View Post
If I understand the rule of thumb I should be able to take out 4% without touching prinicipal....
You might end up eating that rule of thumb, depending upon the economy and your investments, the latter of which you don't seem to have a grasp.

Quote:
It's not laziness that makes me want to retire ..I have some charities & causes I could work with
much more if retired...

Tax Liability...Hummm...not sure..
No reason to think you're lazy but that you don't know the tax liability of your proposed retirement income is scary.
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Old 04-23-2014, 11:30 PM
 
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Quote:
Originally Posted by biscuitmom View Post
You might end up eating that rule of thumb, depending upon the economy and your investments, the latter of which you don't seem to have a grasp.



No reason to think you're lazy but that you don't know the tax liability of your proposed retirement income is scary.
The tax libility is on capital gains, and they are often affected by losses/carried forward losses/deductions...

An area I will learn more about..not scary...
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Old 04-23-2014, 11:49 PM
 
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Quote:
Originally Posted by kelly237 View Post
The tax libility is on capital gains, and they are often affected by losses/carried forward losses/deductions...

An area I will learn more about..not scary...
Your naivete is refreshing yet terrifying. I wish you the best.
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Old 04-24-2014, 01:25 AM
 
Location: Haiku
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Quote:
Originally Posted by kelly237 View Post
I thought the whole point in the 4% withdrawal rule of thumb is that it does not deplete your
investments because it is a rate that would not touch original investments..
That is correct - when someone quotes that 4% rule of thumb, they are referring to skimming off the gains made off the principle.

You should talk to an financial planner. There are lots of things to think about when trying to live off investments.
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Old 04-24-2014, 03:06 AM
 
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Quote:
Originally Posted by kelly237 View Post
I thought the whole point in the 4% withdrawal rule of thumb is that it does not deplete your
investments because it is a rate that would not touch original investments..
your assumption is not correct at all.

the rule is not a rule ,it is a guide . the amount of money left varies over 30 years from zero to more than you started with.

it all depends on yearly market returns, sequences of returns , valuations, interest rates ,inflation and allocations used.

even how long you live is a factor. these studies were done using only 30 year time frames. go out 40 years and things change again.

all the 4% safew withdrawal rate means is you didn't run out of money most of the time. we actually had two time frames where you were broke before 30 years at 4% inflation adjusted. it has nothing to do with whether principal is consumed or not.

while there were many times you ended with more than you started you needed to maintain some moderate levels of equities to do so as well as all the factors above in alignment..
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Old 04-24-2014, 06:16 AM
 
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Quote:
Originally Posted by mathjak107 View Post
it all depends on yearly market returns, sequences of returns , valuations, interest rates ,inflation and allocations used.
Right. And simply put, in years where the value of her investment drops 10-15% (it happens), her income drops 10-15%.
Collecting SS will mitigate that drop, but those 6-10 years without it could get hairy.
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