How are you gonna implement whatever safe withdrawal rate?
Posted: Tue Jul 22, 2003 1:48 am
Some of you are already retired, and some of us are on our way to FIRE.
No matter what it would be interesting to see have you are planning to implement your decided SWR/your best guess (no formulas needed!) on RANGE(no specifics! ) of same.
Personally I believe I will use 3 budgets (basic 2-3% w/r, good 4%, very good 5%) being very flexible as to adjusting same for actual market results on my nest egg. Maybe in line with Gummy's Sensible w/r method, and for sure directly related to the market results/w. upper limits.
I am currently practicing LBYM (live below your means) fairly well, and at FIRE I believe I will be able to adjust up/down with in a resonable range without affecting my happiness too much. As I and Ken have mentioned before; I actually feel BETTER spending less when markets are down, than just blindly pulling a set % + inflation every year.
LBYM is easier than I first expected - the main thing for me is to stop thinking in "wants" and instead in "needs". Added benefit is less "stuff" cluttering my life/needing maintenance Etc. Big expenses are re-considered more than before (do I have something covering my need already? old 25 Inch TV OK rather than new flat screen?/will the new purchase make me happier?).
Naturally the above implies that one would need room to maneuvre spending down to 2% - and further I will have to re-calculate size of nest egg should family/children suddenly appear but that is a different story.
As to the inflation adjustment I also believe that on a personal basis it is easier to keep same low as long as willing to compromise a bit (E.g. to stay on the basic budget). Orange Juice to expensive; get Tang instead, new Pocket PC double price? buy last year model, beef price gone through the roof?, make chicken steaks instead. You get the picture...
As discussed before I could also move to another country to ensure lower cost of living - extreme me!
No matter what it would be interesting to see have you are planning to implement your decided SWR/your best guess (no formulas needed!) on RANGE(no specifics! ) of same.
Personally I believe I will use 3 budgets (basic 2-3% w/r, good 4%, very good 5%) being very flexible as to adjusting same for actual market results on my nest egg. Maybe in line with Gummy's Sensible w/r method, and for sure directly related to the market results/w. upper limits.
I am currently practicing LBYM (live below your means) fairly well, and at FIRE I believe I will be able to adjust up/down with in a resonable range without affecting my happiness too much. As I and Ken have mentioned before; I actually feel BETTER spending less when markets are down, than just blindly pulling a set % + inflation every year.
LBYM is easier than I first expected - the main thing for me is to stop thinking in "wants" and instead in "needs". Added benefit is less "stuff" cluttering my life/needing maintenance Etc. Big expenses are re-considered more than before (do I have something covering my need already? old 25 Inch TV OK rather than new flat screen?/will the new purchase make me happier?).
Naturally the above implies that one would need room to maneuvre spending down to 2% - and further I will have to re-calculate size of nest egg should family/children suddenly appear but that is a different story.
As to the inflation adjustment I also believe that on a personal basis it is easier to keep same low as long as willing to compromise a bit (E.g. to stay on the basic budget). Orange Juice to expensive; get Tang instead, new Pocket PC double price? buy last year model, beef price gone through the roof?, make chicken steaks instead. You get the picture...
As discussed before I could also move to another country to ensure lower cost of living - extreme me!