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Old Yesterday, 01:16 PM
 
2,688 posts, read 1,546,921 times
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Quote:
Originally Posted by mathjak107 View Post
he is skilled enough that the financial planning world hinges and reacts to his findings when it comes to retirement planning . he is the one other financial planners follow .
Hence my skepticism of financial planners, who are more sales people than good investment managers. It is true that, for a price, they offer comfort, and often decent advice, to many retirees. They're just not for me.
YMMV
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Old Yesterday, 01:20 PM
 
Location: Haiku
4,129 posts, read 2,587,409 times
Reputation: 6086
Quote:
Originally Posted by jrkliny View Post
That plan sucks. The 4% rule means you can deplete the portfolio in 30 years. So for the last years you will be taking a very high percentage and in fact at year 30 you take 100%. If you take a flat 4% you are also not even adjusting for inflation.
That is why I said to take the greater of a flat 4% or the originally calculated 4% of starting assets, inflation adjusted. What happens is in early years, when the market is up, the flat 4% will be greater. In later years when you have depleted your portfolio, you will be doing the original 4% rule exclusively.
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Old Yesterday, 01:23 PM
 
71,708 posts, read 71,829,507 times
Reputation: 49273
Quote:
Originally Posted by bigbear99 View Post
Hence my skepticism of financial planners, who are more sales people than good investment managers. It is true that, for a price, they offer comfort, and often decent advice, to many retirees. They're just not for me.
YMMV
the top retirement researchers are a different world.
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Old Yesterday, 01:24 PM
 
12 posts, read 2,115 times
Reputation: 23
I have been following the wit and wisdom of Mathjak for years on this board. He is so wise and I rarely disagree with him.

He appears to use a variable withdrawal system where he takes 4-5% of his current balance. If that is good enough for Mathjak it is good enough for me.
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Old Yesterday, 01:26 PM
 
71,708 posts, read 71,829,507 times
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Quote:
Originally Posted by ranchoparque View Post
If one is willing to accept a variable withdrawal amount, does it make sense to just recalculate in Firecalc every year based on the portfolio amount and the number of years left in the plan?
you could but you run the risk of having to take a pay cut if you go to high because you don't have the time factor to make everything all right . you may no longer be talking decades on the long term money . so while you were doing okay on the original amount looking out 30 years , spending double starting 20 years in may not work out well if we get an extended downturn. personally i like taking a little each time we are up ... if things fall , well you don't get the little . but if you already took it in advance it may not be so pretty.

no one likes pay cuts .
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Old Yesterday, 01:32 PM
 
Location: Haiku
4,129 posts, read 2,587,409 times
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Quote:
Originally Posted by ranchoparque View Post
If one is willing to accept a variable withdrawal amount, does it make sense to just recalculate in Firecalc every year based on the portfolio amount and the number of years left in the plan?
Yes, that is fine. A lot of people do exactly that. I have a chart of that I will upload shortly, but basically after 10 years of retirement your withdrawal rate can go up to 5% from 4%. The downside with this is you are walking the edge. Most people will have lots of leftover money with the 4% rule. If you recalc your withdrawal rate annually, you will end up with $0. Not much room for error.
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Old Yesterday, 01:35 PM
 
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Quote:
Originally Posted by TwoByFour View Post
Yes, that is fine. A lot of people do exactly that. I have a chart of that I will upload shortly, but basically after 10 years of retirement your withdrawal rate can go up to 5% from 4%. The downside with this is you are walking the edge. Most people will have lots of leftover money with the 4% rule. If you recalc your withdrawal rate annually, you will end up with $0. Not much room for error.
it would suck to be 94 , spend 60k a year , have planned to 95 and have 61k left , yet that is a successful retirement to a calculator even though at 95 you have 1k left to live on . so 4% as is designed to leave a lot of residual for emergency and unexpected spending most of the time that can kill a years budget alone .

between our new car and dental we blew last years budget out of the water . so we had overspent the years allocation and of course that now comes out of the future money .so while the left over money looks un-needed on paper , life has a way of consuming much of it unexpectedly .

Last edited by mathjak107; Yesterday at 01:43 PM..
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Old Yesterday, 01:49 PM
 
3,387 posts, read 866,189 times
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Quote:
Originally Posted by old today View Post
I retired at age 61 in 2009 right at the bottom of the stock market crash. My investment portfolio of an even mix of stock and bond funds had dropped around 25% but I decided to retire anyway and strictly follow the 4% rule. (I withdrew 4% of my starting portfolio number- about one million dollars- and increased it 2-3% each year to cover inflation.)

I carefully watched my income and expenses and have lived a pleasant but financially conservative life since then.

Now it is July 2019 and the stock market crash from 2007-to early 2009 is a distant memory. Even with my annual 4% withdrawals, I now have determined my investment accounts are twice as large as they were on my retirement date of 2009. (I now have about 2 Million Dollars)

I am in good health and I want to increase my standard of living. Now that I am 10 years older and have twice as much money as I did in 2009, can't I start the 4% rule distributions all over again and start pulling out $80,000 a year from my investment accounts? What are the rules about this?
Spend just what you need. Don't feel like you have to take out a full __%. If you're betting on the market correcting soon, keep some in cash, don't spend it all.
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Old Yesterday, 01:50 PM
 
6,301 posts, read 4,746,934 times
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Imo there is a better way to recalc. Use firecalc to reset a 95% rate of success based on a new time frame.
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Old Yesterday, 01:55 PM
 
71,708 posts, read 71,829,507 times
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90% is still considered acceptable .

in fact 4% for 30 years is only 95.80% .... you can't get 100% success rate at 4%

60/40 is about the best you can get at 4% for 30 years .

FIRECalc Results
Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.

FIRECalc looked at the 119 possible 30 year periods in the available data, starting with a portfolio of $1,000,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 119 cycles. The lowest and highest portfolio balance at the end of your retirement was $-272,474 to $4,564,899, with an average at the end of $1,416,984. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 5 cycles failed, for a success rate of 95.8%. .
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