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I don’t know if my record keeping is correct or not, but it shows I spent less than 4% in 2018. That’s with one month vacation in Bora Bora, Moorea, and a Honolulu, plus 2 months in Europe including 2 weeks in Switzerland. This year it looks close to that too. At this rate, I’m going to leave a lot of money for my heirs.
I don’t know if my record keeping is correct or not, but it shows I spent less than 4% in 2018. That’s with one month vacation in Bora Bora, Moorea, and a Honolulu, plus 2 months in Europe including 2 weeks in Switzerland. This year it looks close to that too. At this rate, I’m going to leave a lot of money for my heirs.
we also run in actual use about 3.50% a year even though our goal posts are 4%. however our draw is based on each years balance so the fact markets were up except last year has us higher than 4% on the original amount started with . we use bob clyatts 95/5 method .. that forces the goal posts higher if we are better then worst case automatically
The "4% rule" or any rule fir withdrawal wont apply to us.
Because we are late to the party ( i for medical reasons causing me to go broke and taking a set back; my OH for finacial mismanagement, until we got together and I took over), we will have to try to make interest only withdrawals for as long as possible, and even leave some interest reinvested if at all possible.
That way we can preserve as much capital as possible.
We've never had a pension, so that is out.
Even 401ks at workplaces have also gotten really cheap. Sometimes to where you are basically paying them to keep your money. Thats IF you qualify. Like 3 cents on the dollar of the first 1% of your saved amount. Its like why even bother. My OH had one of those for a year. My OH stopped it cause there was little movement, and some months ran negative, making gains even harder. It was like having your savings earn 1/4% in a brick and mortar bank , versus 2.49% at an online bank. So that is out.
So our meager investing and savings will have to be as preserved as possible.
I think going where we want to ( Warmer cheaper climate/city) will make our SS work for us, so as lobg as we can make that work without touching principal, or even adding what is leftover at the months end to principal will have to work.
I used to be able to save something even during lean times, like $0.25 per hour worked, but this summer with my OH s hours cut so dramatically, even thst wasn't possible. Point being i try to save every check i/we get. Even if its only a small amount.
And the key, like in the future is to NOT touch it.
We wont be lavish, but we should be able to make it and still do somethings like do some travelling. There will be a whole new area to explore when we get to our retirement area. That can include day trips to explore. Plus, like we do now every about 5 years go on a major vacation, if ican still save for a major vacation.
The "4% rule" or any rule fir withdrawal wont apply to us.
Because we are late to the party ( i for medical reasons causing me to go broke and taking a set back; my OH for finacial mismanagement, until we got together and I took over), we will have to try to make interest only withdrawals for as long as possible, and even leave some interest reinvested if at all possible.
That way we can preserve as much capital as possible.
We've never had a pension, so that is out.
Even 401ks at workplaces have also gotten really cheap. Sometimes to where you are basically paying them to keep your money. Thats IF you qualify. Like 3 cents on the dollar of the first 1% of your saved amount. Its like why even bother. My OH had one of those for a year. My OH stopped it cause there was little movement, and some months ran negative, making gains even harder. It was like having your savings earn 1/4% in a brick and mortar bank , versus 2.49% at an online bank. So that is out.
So our meager investing and savings will have to be as preserved as possible.
I think going where we want to ( Warmer cheaper climate/city) will make our SS work for us, so as lobg as we can make that work without touching principal, or even adding what is leftover at the months end to principal will have to work.
I used to be able to save something even during lean times, like $0.25 per hour worked, but this summer with my OH s hours cut so dramatically, even thst wasn't possible. Point being i try to save every check i/we get. Even if its only a small amount.
And the key, like in the future is to NOT touch it.
We wont be lavish, but we should be able to make it and still do somethings like do some travelling. There will be a whole new area to explore when we get to our retirement area. That can include day trips to explore. Plus, like we do now every about 5 years go on a major vacation, if ican still save for a major vacation.
Best to those who like us, will make it work.
but doesn't that meager savings have to last as long as you do ?
Is there any similar withdrawal analysis that works on a “what money will buy” context? Perhaps living in an average house in an average climate driving an average car. Paying taxes in average times. Average inflation. Etc. Then maybe you could designate where you wanted to spend. At the 50% level (average)? Or at the 68 % level? How soon would you run out.
Sure there would have to be a lot of conditions like no other investments, but could it be informative?
Is there any similar withdrawal analysis that works on a “what money will buy” context? Perhaps living in an average house in an average climate driving an average car. Paying taxes in average times. Average inflation. Etc. Then maybe you could designate where you wanted to spend. At the 50% level (average)? Or at the 68 % level? How soon would you run out.
Sure there would have to be a lot of conditions like no other investments, but could it be informative?
the problem is no one is average .... average is the end result of everyone being different .
the other issue is just about everything we do is a want not a need . we want to not have to live golden girl style while we could , we want to live in certain areas , we want certain living accommodations . so we all have this line in the sand as a minimum we are willing to accept and it is different for all of us .
Last edited by mathjak107; 09-08-2019 at 05:07 AM..
I don’t know if my record keeping is correct or not, but it shows I spent less than 4% in 2018. That’s with one month vacation in Bora Bora, Moorea, and a Honolulu, plus 2 months in Europe including 2 weeks in Switzerland. This year it looks close to that too. At this rate, I’m going to leave a lot of money for my heirs.
remember though it is not 4% of total income , it is only the portion of income from the portfolio .
so if one needs 150k and 50k is coming from ss , pension , annuity , etc , then 100k is needed from the portfolio ... 2.50 million in a portfolio would be what a safe withdrawal rate is looking at if it was 4% ...
but doesn't that meager savings have to last as long as you do ?
That is not going to happen easily. If you read the story carefully it appears those savings are "invested" at negative to less than 3% return. That has been going on for years so the money they set aside has not grown. Continuing that in the future also negates the 4% rule. Instead the OP is trying to keep withdrawals to interest only, which is close to zero.
but doesn't that meager savings have to last as long as you do ?
Gee, math, I'm surprised that you, of all people, didnt see the answer to your question in my diatribe above.
BECAUSE we wont touch principle ( and interest if we can help it) for as long as possible, BEFORE withdrawing ( by any rule), will help to ensure it will last as long as we do.
Hopefully. We can continue, in one form or another, to let it grow so it CAN outlast us.
That is not going to happen easily. If you read the story carefully it appears those savings are "invested" at negative to less than 3% return. That has been going on for years so the money they set aside has not grown. Continuing that in the future also negates the 4% rule. Instead the OP is trying to keep withdrawals to interest only, which is close to zero.
Close, but not quite.
We tried tyat lousy 401k for a year, and stopped it. BEFORE it became what you just said.
And we turned to better alternatives, hence the Reasons for ROTH s.
Heck, even CDs are paying better than that 401k, especially online ones, and we have those too.
Its not much compared to some of your portfolios, but its the best we can do, especially since i have drawn SSDI for 16 years of the 19 we've been together.
And since i just came out of homelessness, and my OH just out of bankruptcy when we got together 20 years years ago, ( and got married in 2002), i dont think we are doing so bad. We own a home, half paid for in just 4 years, have two paid for cars, money in the "bank".
I do work on occasions, but my health messes it up greatly. So i only work sporadically, trying to bank every cent i take home.
My OH works two jobs, sometimes its 50 hours for the week, sometimes only 12. I have to juggle savings in good times for having enough in bad times, and saving permanently for retirement, or at least older age in case we dont get there to actually retirement.
Every one juggles finances, even well laid out plans, we just wont have as much to juggle as many of you.
And the key, at least for us, is....not to touch it until absolutely necessary. To let it compound and grow.
If we can reach our hoal, well have about a half million.
Worse will be only $300k, but thats more than we had when we got together.
Had i not had to use my 1980s retirement savings of $75k for living and medical expenses , and just let it compound to now, according to some calculators itd be near a million now, even withour adding more to it. But i had to live....
But the late start in 2000 when we were serious enough about each other to make a go of it will be hurtful to us, but we'll manage....some how.
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