a new look at the proverbial 4% withdrawl rate for retirees (retirement plan, invested)

[mathjak107]

for anyone interested in planning for retirement the question of how much is enough is the unknown.

heck it would be real easy to plan a portfolio and strategy if we knew the day we would die but since we dont thats a big variable to deal with. bouncing the check to the funeral home would be in all our plans.

it was believed until recently pulling 4% a year with a raise for inflation would have your money lasting at least 30 years.

new studies say thats not true anymore and the failure rate of running out of money to soon runs as high as 18%.

thats a far cry from the 95% chance of success most calculators show.

anyone some very very smart people re-looked at this with some surprising results. kind of dry reading but non the less if you jump to the conclusion part you will get there spin on it.


A Safer Safe Withdrawal Rate Using Various Return Distributions

[Jason28]

My retirement plan is to get the house paid off and have just enough money for things like essentials, taxes, and utilities. I plan on skipping health insurance as it will probably be 4,000 dollars a month by the time I retire. Besides, if I die sooner then who cares. For food I'm going to just farm some vegetables and maybe have a goat/chicken running around.

[mathjak107]

better keep lots for real estate taxes and fuel to heat the house. that chicken and goat may even feed you for a week.

[Texas User]

$25K a year is all I will withdraw. I plan to retire at age 55 and live up to 110.

[howard555]

Originally Posted by Texas User

$25K a year is all I will withdraw. I plan to retire at age 55 and live up to 110.

Despite state and federal laws, let's bet.
I'll bet you $5000, you do not live to be 110.

$25,000 will be a withdrawal of:

"what" %
from "where?"
and on what road are you taking to get to the "where."

Due to my job history my SS and pension combined, is only about $13,000 a year.

Your's may be alot higher.

[mathjak107]

25k drawn from savings represents a million bucks in a nest egg today. of course the other big question is invested in what? that 4% old conventional rule figures at least a 50/50 mix. if i remember correctly ole tex here said he will be out of equities 5 years before retirement .

hope he has a better plan than he is expressing to us or is secretly wealthy.

[howard555]

Originally Posted by mathjak107

25k drawn from savings represents a million bucks

25K = 2.5% draw from $1M

[mathjak107]

thats about it right now with rates sooooooooo low and if you have little equity exposure.

[Texas User]

Originally Posted by howard555

Despite state and federal laws, let's bet.
I'll bet you $5000, you do not live to be 110.

$25,000 will be a withdrawal of:

"what" %
from "where?"
and on what road are you taking to get to the "where."

Due to my job history my SS and pension combined, is only about $13,000 a year.

Your's may be alot higher.

What if I continued to take care of my health, workout, eat healthy?

Lets assume $25K a year from $1 Million and then adding up to $2.5 million at the most.

Lol, this means if I do live up to 110 then I win and if I don't live up to 110 then I am dead, you lose!

SS will be much lower or none in my retirement.

[Texas User]

I am hoping the interest rates will be very high like 10% then and the inflation rate at like -3 (negative 3). Very low taxes.