Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

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mikejuss
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by mikejuss »

Brianmcg321 wrote: Sun Aug 01, 2021 1:02 am You used a fixed withdrawal rate of 50,000, not 5%.

A 5% rate would fair much better.
https://www.portfoliovisualizer.com/bac ... tion2_2=40
+1. OP, not sure what you're talking about here.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by samsoes »

Retiring in 2000?
Aren't you worried about the Y2K bug? :!:
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by milktoast »

galawdawg wrote: Sun Aug 01, 2021 11:51 am And as I pointed out earlier in the tread, even with a 5% withdrawal rate adjusted annually for inflation, the 2000 hypothetical retiree invested 60/40 in Vanguard Total Stock Index and Vanguard Total Bond Index would today still have close to $600k in their portfolio.
Thanks. That seems more realistic. But it's still grim. The inflation adjusted balance is closer to $360k. So the spending power of the account has dropped by 2/3 over 21 years. Leaving roughly 7 years of spending. So looks like 2000 is on track to barely make it to 30 years at 5% SWR.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by EddyB »

milktoast wrote: Mon Aug 02, 2021 1:16 pm
galawdawg wrote: Sun Aug 01, 2021 11:51 am And as I pointed out earlier in the tread, even with a 5% withdrawal rate adjusted annually for inflation, the 2000 hypothetical retiree invested 60/40 in Vanguard Total Stock Index and Vanguard Total Bond Index would today still have close to $600k in their portfolio.
Thanks. That seems more realistic. But it's still grim. The inflation adjusted balance is closer to $360k. So the spending power of the account has dropped by 2/3 over 21 years. Leaving roughly 7 years of spending. So looks like 2000 is on track to barely make it to 30 years at 5% SWR.
Getting 25% over the most-oft cited “SWR” for 30 years doesn’t seem grim to me.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by pepys »

JoeRetire wrote: Sun Aug 01, 2021 6:17 am
supersharpie wrote: Sun Aug 01, 2021 6:12 am Also, some of you Debbie Downers act like your portfolio is your only source of income, when roughly 95% of Americans qualify for Social Security. Assuming you don't enter retirement with a mortgage, the Social Security benefit alone insures you won't need to eat the proverbial cat food.
The estimated average Social Security retirement benefit in 2021 is only $1,543 a month.

And cat food is getting expensive.
$1,543 is considerably more than I am spending right now, and I don't even eat cat food. Indeed, with $1,543 per month ($18,516 per year), you would be wealthier than 89% of the world. It probably wouldn't work well for people who are used to and committed to even more lofty lifestyles, but the large majority of people *could* live with a higher standard of living than the vast majority of people on that income.
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JoeRetire
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by JoeRetire »

pepys wrote: Mon Aug 02, 2021 1:36 pm $1,543 is considerably more than I am spending right now, and I don't even eat cat food.
Are you the dog food type?
Indeed, with $1,543 per month ($18,516 per year), you would be wealthier than 89% of the world.
If you lived in the "other 89%" of the world that might be relevant.
It probably wouldn't work well for people who are used to and committed to even more lofty lifestyles, but the large majority of people *could* live with a higher standard of living than the vast majority of people on that income.
By that logic, you *could* live on nothing but handouts.

If your goal is to have enough to stay alive, social security can provide that. At least in my part of the world, it won't provide a lot more than that for many.
Last edited by JoeRetire on Mon Aug 02, 2021 1:51 pm, edited 2 times in total.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by FactualFran »

invest2bfree wrote: Sun Aug 01, 2021 12:34 pm Is there anybody who can run the same experiment to start at 1966.
The 1994 article Determining Withdrawal Rates Using Historical Data by William Bengen has the results of the same type of experiment. Here is a copy of Figure 2 from that article.

Image

In the figure, the bars for portfolios of 50% stocks and 75% stocks when the initial withdrawal rate was 4% end slightly more than half way between the grid lines for 20 years and 40 years, which indicates that the minimum number of year those portfolios lasted was slightly more than 30 years. The bar for 100% stocks ends about a quarter of the way between those grid lines, which indicates that the minimum was about 25 years.

According to the text of the article, in the next to last paragraph on the same page as the figure, when using 75% stocks instead of 50%: "The only penalties occur in portfolio year 1966, which is shortened by one year, from 33 to 32 years, and in 1969, which is shortened from 36 years to 34."

The text of the article does not state the minimum number of years when using 100% stocks. Doing the calculations, the minimum number of years for an initial withdrawal rate of 4% was 26. It was 16 years for an initial withdrawal rate of 5%.

A portfolio of 100% stocks can last for fewer years than desired. An initial withdrawal rate of 5% can result in a portfolio lasting for fewer years than desired.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by pepys »

JoeRetire wrote: Mon Aug 02, 2021 1:39 pm Are you the dog food type?
No. It is extremely easy for people without health issues and not living in an absurdly expensive place to eat regular food for less than $100 a month. I do about $40 a month. This forum is massively out of touch with how the vast majority of people live.
If you lived in the "other 89%" of the world that might be relevant.
Like I said, you may have to move.
By that logic, you *could* live on nothing but handouts.
I don't see how that follows at all from what I said. Handouts are not guaranteed and it would usually require actually "working" for the handouts (begging?). And it's probably dependent on where you live, unless if you are getting it from family. It's not remotely comparable to being retired and living off of your assets/benefits.

And to be clear, I am not denigrating anyone wanting to live on higher incomes. I am just tired of people acting like living on an income higher than 90% of people is equivalent to eating dog food.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by JoeRetire »

pepys wrote: Mon Aug 02, 2021 1:56 pm No. It is extremely easy for people without health issues and not living in an absurdly expensive place to eat regular food for less than $100 a month. I do about $40 a month. This forum is massively out of touch with how the vast majority of people live.
The vast majority of people cannot eat on $10 per week.
If you lived in the "other 89%" of the world that might be relevant.
Like I said, you may have to move.
Moving is expensive. Moving to the "other 89%" of the world might be even more expensive.
And to be clear, I am not denigrating anyone wanting to live on higher incomes. I am just tired of people acting like living on an income higher than 90% of people is equivalent to eating dog food.
I understand that some people think having only social security is livin' high on the hog. Why, in parts of Pakistan, you could live on pennies a day! Of course moving to Pakistan could be expensive.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by nigel_ht »

O LORD, bless this retirement portfolio, that with it I mayest retireth in ease, in Thy mercy." And the LORD did grin, and the people did feast upon the lambs and sloths and carp and anchovies and orangutans and breakfast cereals, and fruit bats and large chu... [skipping ahead]... And the LORD spake, saying, "First shalt thou invest in the Holy Trinity VTSAX, VTIAX and VBTLX. Then shalt thou withdraw three percent, no more, no less. Three shall be the number thou shalt withdrawal, and the number of the withdrawal shall be three. Four shalt thou not withdraw, neither withdraw thou two, excepting that thou then proceed to three. Five is right out. Once the number three percent, being the third number and Blessed In My Sight, be withdrawn, then thou may rest easy in your retirement for it is SWR.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by Somethingwitty92912 »

sfnerd wrote: Mon Aug 02, 2021 3:12 am
Somethingwitty92912 wrote: Sun Aug 01, 2021 7:20 am
sfnerd wrote: Sun Aug 01, 2021 4:00 am
minimalistmarc we wrote: Sun Aug 01, 2021 3:24 am
Brianmcg321 wrote: Sun Aug 01, 2021 1:02 am You used a fixed withdrawal rate of 50,000, not 5%.

A 5% rate would fair much better.
https://www.portfoliovisualizer.com/bac ... tion2_2=40
Bogleheads should find this highly reassuring as I’m guessing most of us have a lot of extras we can cut if required (for example luxury holidays/restaurants) and over estimate our annual expenses.
That's not reassuring at all... In this method your withdrawal drops to 25k in one year. If that were your actual strategy you'd be eating dog food.

The original poster had it right: withdrawing 5% of the portfolio and adjusting for inflation.

The only thing this shows is that high withdrawal rates aren't safe, and if you have a bad sequence it will kill your portfolio.
If you are eating dog food on 25k a year you must only eat golden plated steak on golden plates.

Don’t go out to eat, learn to cook, and you’d still eat very very good on 25k a year. This is where the hcola living standard and keeping up with the Jones bites a lot of people in the ass.
I was obviously not referring to real dogfood. I grew up living on a lot less than $25k. It's an expression. However, if you start retirement expecting X in income, and you now have to live on half of X, you have failed in your planning. The lifestyle you planned for has been cut in half.

5% just isn't "safe". The OP used $1m as an example. What if your number is $500k? You're expecting 25k @ 5%, but then you end up at $12,500, which is tough even if you are very frugal.

As an aside, while I totally agree that $25k is doable, it certainly isn't a picnic if you have to purchase your own healthcare (retiring before medicare age), or have other expenses out of your control. Also, if you're in a HCOL, it can be hard, and while you can always move, it might mean being far from kids, grandkids, friends, etc.
Yeah, I agree with almost everything you’ve said. My only argument that 25k a year is plenty to eat on.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by pepys »

JoeRetire wrote: Mon Aug 02, 2021 2:10 pm
pepys wrote: Mon Aug 02, 2021 1:56 pm No. It is extremely easy for people without health issues and not living in an absurdly expensive place to eat regular food for less than $100 a month. I do about $40 a month. This forum is massively out of touch with how the vast majority of people live.
The vast majority of people cannot eat on $10 per week.
If you lived in the "other 89%" of the world that might be relevant.
Like I said, you may have to move.
Moving is expensive. Moving to the "other 89%" of the world might be even more expensive.
And to be clear, I am not denigrating anyone wanting to live on higher incomes. I am just tired of people acting like living on an income higher than 90% of people is equivalent to eating dog food.
I understand that some people think having only social security is livin' high on the hog. Why, in parts of Pakistan, you could live on pennies a day! Of course moving to Pakistan could be expensive.
Moving to Pakistan would be expensive, but you generally don't need to move to another country to cut down. I currently live in Columbus OH, not Pakistan, and even that is a relatively expensive area in the US (and I do it on about $1,000 per month). On $1,500 your living standard can be high enough that you can usually easily stay in developed countries.

I never said the vast majority could live on $10 per week, I said $100 per month. I have been able to cut it down considerably more, but it takes some time and knowledge that others might not have.

Yes, everyone on this forum is probably living high on the hog.
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hiddenpower
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by hiddenpower »

Brianmcg321 wrote: Sun Aug 01, 2021 1:02 am You used a fixed withdrawal rate of 50,000, not 5%.

A 5% rate would fair much better.
https://www.portfoliovisualizer.com/bac ... tion2_2=40
So the 4% (or 5%) rule is based not on the initial principal but must be adjusted yearly it appears?
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by MarkRoulo »

pepys wrote: Mon Aug 02, 2021 2:59 pm
JoeRetire wrote: Mon Aug 02, 2021 2:10 pm
pepys wrote: Mon Aug 02, 2021 1:56 pm No. It is extremely easy for people without health issues and not living in an absurdly expensive place to eat regular food for less than $100 a month. I do about $40 a month. This forum is massively out of touch with how the vast majority of people live.
The vast majority of people cannot eat on $10 per week.
If you lived in the "other 89%" of the world that might be relevant.
Like I said, you may have to move.
Moving is expensive. Moving to the "other 89%" of the world might be even more expensive.
And to be clear, I am not denigrating anyone wanting to live on higher incomes. I am just tired of people acting like living on an income higher than 90% of people is equivalent to eating dog food.
I understand that some people think having only social security is livin' high on the hog. Why, in parts of Pakistan, you could live on pennies a day! Of course moving to Pakistan could be expensive.
Moving to Pakistan would be expensive, but you generally don't need to move to another country to cut down. I currently live in Columbus OH, not Pakistan, and even that is a relatively expensive area in the US (and I do it on about $1,000 per month). On $1,500 your living standard can be high enough that you can usually easily stay in developed countries.

I never said the vast majority could live on $10 per week, I said $100 per month. I have been able to cut it down considerably more, but it takes some time and knowledge that others might not have.

Yes, everyone on this forum is probably living high on the hog.
I think your claim of $100/month (for food, right?) would be better received if you provided a rough breakdown. It would help those folks who DON'T see how to do it.

Something like this:
  • 10 pounds of rice: $8
  • XXX pounds of beans: $yy
  • 3 pounds of butter: $xx
  • 5 pounds of flour: $zz
  • 4 pounds of inexpensive beef (use crock pot): $___
I expect this would take you five minutes or less (because only rough numbers would be needed).

Otherwise the thread can easily turn into a "no you can't", "yes I can" back and forth.

Note that in some VCOL areas, a loaf of sourdough bread at the supermarket runs about $5. You can bake at home for considerably less. And day-old stores are somewhere in the middle. The folks thinking that bread is $5/loaf won't be able to see your point if you don't help them.

FYI: I have the same claim for folks who think that one CAN'T get by on less than $$some-large-number. Showing where the money goes (at least roughly) helps the folks who don't believe you claim a lot more than just repeating the claim with slightly different phrasing.

-Cheers!
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by MarkRoulo »

hiddenpower wrote: Mon Aug 02, 2021 3:04 pm
Brianmcg321 wrote: Sun Aug 01, 2021 1:02 am You used a fixed withdrawal rate of 50,000, not 5%.

A 5% rate would fair much better.
https://www.portfoliovisualizer.com/bac ... tion2_2=40
So the 4% (or 5%) rule is based not on the initial principal but must be adjusted yearly it appears?
It is important to realize that the "rule" is
  • A historical observation about the past US stock and bond market
  • Which is useful as a starting point to decide when one has "enough" to retire
It is NOT a rule for HOW to withdraw money during retirement.

The 4% observation was based on the initial principal and then adjusted yearly for inflation. The idea was to keep retirement spending constant in inflation adjusted terms.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by TimeTheMarket »

minimalistmarc wrote: Sun Aug 01, 2021 3:24 am
Brianmcg321 wrote: Sun Aug 01, 2021 1:02 am You used a fixed withdrawal rate of 50,000, not 5%.

A 5% rate would fair much better.
https://www.portfoliovisualizer.com/bac ... tion2_2=40
Bogleheads should find this highly reassuring as I’m guessing most of us have a lot of extras we can cut if required (for example luxury holidays/restaurants) and over estimate our annual expenses.
In this scenario I would probably put one of the yachts in storage for the season, and possibly downgrade to first class instead of chartered private. It's the little things we can do that add up.

-------

Lost to some of the posts above is that if you can barely retire with your nest egg, you're going to face substantial risk because you just can't cut back. If you have a decent buffer you can cut back when necessary and wait for a market recovery. It's a huge deal going from $50k/year to $35k income, but is it really a huge deal going from $500k to $350?
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JoeRetire
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by JoeRetire »

nigel_ht wrote: Mon Aug 02, 2021 2:18 pm O LORD, bless this retirement portfolio, that with it I mayest retireth in ease, in Thy mercy." And the LORD did grin, and the people did feast upon the lambs and sloths and carp and anchovies and orangutans and breakfast cereals, and fruit bats and large chu... [skipping ahead]... And the LORD spake, saying, "First shalt thou invest in the Holy Trinity VTSAX, VTIAX and VBTLX. Then shalt thou withdraw three percent, no more, no less. Three shall be the number thou shalt withdrawal, and the number of the withdrawal shall be three. Four shalt thou not withdraw, neither withdraw thou two, excepting that thou then proceed to three. Five is right out. Once the number three percent, being the third number and Blessed In My Sight, be withdrawn, then thou may rest easy in your retirement for it is SWR.
Amen.

Right. One... two... five!

Three, sir.

Three!
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JoeRetire
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by JoeRetire »

pepys wrote: Mon Aug 02, 2021 2:59 pm I never said the vast majority could live on $10 per week, I said $100 per month. I have been able to cut it down considerably more, but it takes some time and knowledge that others might not have.
Are you a Breatharian? Or, Rice and Beans, Beans and Rice?
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by Wrench »

invest2bfree wrote: Sun Aug 01, 2021 12:48 am https://www.portfoliovisualizer.com/bac ... tion2_2=40


It is really a sad state of affairs if we are going to repeat the last 20 years especially with low yields going forward.

If I plan to withdraw $50,000 with a starting total of $1M ran out of money in 2016 for 100% S&P 500 allocation.

60% stocks and 40% cash barely made it with only $197,096 as the remainder. I used cash because of the low yields we are experiencing. I do not believe the bond markets returns of last 20 years cannot be repeated.
So, if that is a problem for you, then plan so it won't be. For example:
1. Work longer or save more.
2. Retire, and adjust spending in bad years.
3. Retire, and work part time.
4. Wait to take Social security until age 70.
5. Using lower withdrawal rate or different AA or different funds (as many others have suggested).
6. Live on less or more frugally.

I don't find it particularly "sad". It just suggests that one needs to be willing/able to appropriately plan/adjust their lifestyle to the reality of an unknown future. To me, it's a challenge! One that I look forward to meeting and beating!

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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by Brianmcg321 »

hiddenpower wrote: Mon Aug 02, 2021 3:04 pm
Brianmcg321 wrote: Sun Aug 01, 2021 1:02 am You used a fixed withdrawal rate of 50,000, not 5%.

A 5% rate would fair much better.
https://www.portfoliovisualizer.com/bac ... tion2_2=40
So the 4% (or 5%) rule is based not on the initial principal but must be adjusted yearly it appears?

Well if my portfolio dropped 50%, I wouldn’t just blindly keep withdrawing $50k a year and hope that it all just works out. And really I don’t think anyone would either.

If you had a job making $50k a year and then got laid off, would you keep spending like you still had that job, or would you maybe tighten your belt a bit and spend less?
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by vanbogle59 »

nigel_ht wrote: Mon Aug 02, 2021 2:18 pm O LORD, bless this retirement portfolio, that with it I mayest retireth in ease, in Thy mercy." And the LORD did grin, and the people did feast upon the lambs and sloths and carp and anchovies and orangutans and breakfast cereals, and fruit bats and large chu... [skipping ahead]... And the LORD spake, saying, "First shalt thou invest in the Holy Trinity VTSAX, VTIAX and VBTLX. Then shalt thou withdraw three percent, no more, no less. Three shall be the number thou shalt withdrawal, and the number of the withdrawal shall be three. Four shalt thou not withdraw, neither withdraw thou two, excepting that thou then proceed to three. Five is right out. Once the number three percent, being the third number and Blessed In My Sight, be withdrawn, then thou may rest easy in your retirement for it is SWR.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by skierincolorado »

milktoast wrote: Mon Aug 02, 2021 1:16 pm
galawdawg wrote: Sun Aug 01, 2021 11:51 am And as I pointed out earlier in the tread, even with a 5% withdrawal rate adjusted annually for inflation, the 2000 hypothetical retiree invested 60/40 in Vanguard Total Stock Index and Vanguard Total Bond Index would today still have close to $600k in their portfolio.
Thanks. That seems more realistic. But it's still grim. The inflation adjusted balance is closer to $360k. So the spending power of the account has dropped by 2/3 over 21 years. Leaving roughly 7 years of spending. So looks like 2000 is on track to barely make it to 30 years at 5% SWR.
Who has ever recommended 5% withdrawal rate for a 30+ year retirement? For a 25 year retirement, sure. Even starting in the 2000 bubble it made it well over 25 years.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by invest2bfree »

invest2bfree wrote: Sun Aug 01, 2021 12:48 am https://www.portfoliovisualizer.com/bac ... tion2_2=40


It is really a sad state of affairs if we are going to repeat the last 20 years especially with low yields going forward.

If I plan to withdraw $50,000 with a starting total of $1M ran out of money in 2016 for 100% S&P 500 allocation.

60% stocks and 40% cash barely made it with only $197,096 as the remainder. I used cash because of the low yields we are experiencing. I do not believe the bond markets returns of last 20 years cannot be repeated.

Thanks everyone for a great discussion. Learnt a lot.

Couple of takeaways is that there is no Fire for me until my kids finish college which is basically 10 years away. Iam 46 turning 47 in shortly, I will stick around in my job no matter what. Now this a megacorp and they might lay me off and I could be forced into fire.

I do believe some amount value tilt could have helped here.
I added vdigx to the mix, it survived very well with $600k residual value and it performed the best.

May be a 50% vdigx and 50% spy would have done the trick.

https://www.portfoliovisualizer.com/bac ... ion3_3=100
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by delamer »

hiddenpower wrote: Mon Aug 02, 2021 3:04 pm
Brianmcg321 wrote: Sun Aug 01, 2021 1:02 am You used a fixed withdrawal rate of 50,000, not 5%.

A 5% rate would fair much better.
https://www.portfoliovisualizer.com/bac ... tion2_2=40
So the 4% (or 5%) rule is based not on the initial principal but must be adjusted yearly it appears?
Those aren’t mutually exclusive.

You determine your first year’s withdrawal by multiplying your portfolio balance by 4%.

Then, each year, you adjust that initial withdrawal by the change in the CPI.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by delamer »

pepys wrote: Mon Aug 02, 2021 2:59 pm
JoeRetire wrote: Mon Aug 02, 2021 2:10 pm
pepys wrote: Mon Aug 02, 2021 1:56 pm No. It is extremely easy for people without health issues and not living in an absurdly expensive place to eat regular food for less than $100 a month. I do about $40 a month. This forum is massively out of touch with how the vast majority of people live.
The vast majority of people cannot eat on $10 per week.
If you lived in the "other 89%" of the world that might be relevant.
Like I said, you may have to move.
Moving is expensive. Moving to the "other 89%" of the world might be even more expensive.
And to be clear, I am not denigrating anyone wanting to live on higher incomes. I am just tired of people acting like living on an income higher than 90% of people is equivalent to eating dog food.
I understand that some people think having only social security is livin' high on the hog. Why, in parts of Pakistan, you could live on pennies a day! Of course moving to Pakistan could be expensive.
Moving to Pakistan would be expensive, but you generally don't need to move to another country to cut down. I currently live in Columbus OH, not Pakistan, and even that is a relatively expensive area in the US (and I do it on about $1,000 per month). On $1,500 your living standard can be high enough that you can usually easily stay in developed countries.

I never said the vast majority could live on $10 per week, I said $100 per month. I have been able to cut it down considerably more, but it takes some time and knowledge that others might not have.

Yes, everyone on this forum is probably living high on the hog.
What expenses are included that $1,000/month?
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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vanbogle59
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by vanbogle59 »

delamer wrote: Mon Aug 02, 2021 4:12 pm What expenses are included that $1,000/month?
1) High speed internet.
2) Oculus Rift.

What more do you need?
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by pepys »

MarkRoulo wrote: Mon Aug 02, 2021 3:24 pm
pepys wrote: Mon Aug 02, 2021 2:59 pm
JoeRetire wrote: Mon Aug 02, 2021 2:10 pm
pepys wrote: Mon Aug 02, 2021 1:56 pm No. It is extremely easy for people without health issues and not living in an absurdly expensive place to eat regular food for less than $100 a month. I do about $40 a month. This forum is massively out of touch with how the vast majority of people live.
The vast majority of people cannot eat on $10 per week.
If you lived in the "other 89%" of the world that might be relevant.
Like I said, you may have to move.
Moving is expensive. Moving to the "other 89%" of the world might be even more expensive.
And to be clear, I am not denigrating anyone wanting to live on higher incomes. I am just tired of people acting like living on an income higher than 90% of people is equivalent to eating dog food.
I understand that some people think having only social security is livin' high on the hog. Why, in parts of Pakistan, you could live on pennies a day! Of course moving to Pakistan could be expensive.
Moving to Pakistan would be expensive, but you generally don't need to move to another country to cut down. I currently live in Columbus OH, not Pakistan, and even that is a relatively expensive area in the US (and I do it on about $1,000 per month). On $1,500 your living standard can be high enough that you can usually easily stay in developed countries.

I never said the vast majority could live on $10 per week, I said $100 per month. I have been able to cut it down considerably more, but it takes some time and knowledge that others might not have.

Yes, everyone on this forum is probably living high on the hog.
I think your claim of $100/month (for food, right?) would be better received if you provided a rough breakdown. It would help those folks who DON'T see how to do it.

Something like this:
  • 10 pounds of rice: $8
  • XXX pounds of beans: $yy
  • 3 pounds of butter: $xx
  • 5 pounds of flour: $zz
  • 4 pounds of inexpensive beef (use crock pot): $___
I expect this would take you five minutes or less (because only rough numbers would be needed).

Otherwise the thread can easily turn into a "no you can't", "yes I can" back and forth.

Note that in some VCOL areas, a loaf of sourdough bread at the supermarket runs about $5. You can bake at home for considerably less. And day-old stores are somewhere in the middle. The folks thinking that bread is $5/loaf won't be able to see your point if you don't help them.

FYI: I have the same claim for folks who think that one CAN'T get by on less than $$some-large-number. Showing where the money goes (at least roughly) helps the folks who don't believe you claim a lot more than just repeating the claim with slightly different phrasing.

-Cheers!
If someone was doubting my $40 food budget, I would agree, but $100 is done by such a massive number of people that there isn't much point in bringing out numbers. It's mostly just worthy of an eye roll. And I didn't want to spend 5 minutes on a extremely rough response because then someone could easily respond "ha! The food you listed is lacking in several nutrients" or "ha! Item x is 50% more expensive where I shop".

But fair enough. Let's assume a 2000 calorie diet...

If I went to the Kroger right near me right now, with no sales or deals, not counting cashback:

42 oz oats = 4,500 cal = $2.69 = 1,670 cal/$
1 lb peanut butter = 2,520 cal = $1.50 = 1,680 cal/$
2 lb pinto beans = 2,340 cal = $1.69 = 1,380 cal/$
2 lb brown rice = 3,200 cal = $1.49 = 2,150 cal/$

Let's say you split each of those equally for 1,500 calories (375 each) - that comes out to about $0.87 per day.

For the rest of the 500 calories, some ideas that look decent: 6 oz frozen broccoli ($0.47), a banana ($0.27), a large egg ($0.15), a quarter pound of baby carrots ($0.25), a cup and a half of milk ($0.23).

Final number: $2.24 per day, ~$68 per month. Plus is probably healthier than most people eat - well over the RDA on almost everything when I plug into cronometer, and the few below are pretty easy and cheap to get, but I don't want to redo the numbers (like replacing some of the rice with canola oil for omega-3 fatty acids).

My place is probably cheaper than many others, but 50% more expensive is probably rare. Plus there are areas to cut/replace (replacing brown rice with cheaper rice, adding some canola oil, cutting back on calories, changing the random foods I added to cheaper alternatives), and there's no reason to avoid sales/cashback/deals.
pepys
Posts: 174
Joined: Mon Nov 12, 2018 9:34 am

Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by pepys »

delamer wrote: Mon Aug 02, 2021 4:12 pm
pepys wrote: Mon Aug 02, 2021 2:59 pm
JoeRetire wrote: Mon Aug 02, 2021 2:10 pm
pepys wrote: Mon Aug 02, 2021 1:56 pm No. It is extremely easy for people without health issues and not living in an absurdly expensive place to eat regular food for less than $100 a month. I do about $40 a month. This forum is massively out of touch with how the vast majority of people live.
The vast majority of people cannot eat on $10 per week.
If you lived in the "other 89%" of the world that might be relevant.
Like I said, you may have to move.
Moving is expensive. Moving to the "other 89%" of the world might be even more expensive.
And to be clear, I am not denigrating anyone wanting to live on higher incomes. I am just tired of people acting like living on an income higher than 90% of people is equivalent to eating dog food.
I understand that some people think having only social security is livin' high on the hog. Why, in parts of Pakistan, you could live on pennies a day! Of course moving to Pakistan could be expensive.
Moving to Pakistan would be expensive, but you generally don't need to move to another country to cut down. I currently live in Columbus OH, not Pakistan, and even that is a relatively expensive area in the US (and I do it on about $1,000 per month). On $1,500 your living standard can be high enough that you can usually easily stay in developed countries.

I never said the vast majority could live on $10 per week, I said $100 per month. I have been able to cut it down considerably more, but it takes some time and knowledge that others might not have.

Yes, everyone on this forum is probably living high on the hog.
What expenses are included that $1,000/month?
Rent, food, internet, utilities, insurance, phone, whatever else I spent over the last year. Does not include health insurance since that is with my employer, but I also live in a very expensive place to be close to my employer - if I was retired, I suspect my expenses would be lower.
MarkRoulo
Posts: 1198
Joined: Mon Jun 22, 2015 10:25 am

Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by MarkRoulo »

pepys wrote: Mon Aug 02, 2021 4:42 pm
MarkRoulo wrote: Mon Aug 02, 2021 3:24 pm
pepys wrote: Mon Aug 02, 2021 2:59 pm
JoeRetire wrote: Mon Aug 02, 2021 2:10 pm
pepys wrote: Mon Aug 02, 2021 1:56 pm No. It is extremely easy for people without health issues and not living in an absurdly expensive place to eat regular food for less than $100 a month. I do about $40 a month. This forum is massively out of touch with how the vast majority of people live.
The vast majority of people cannot eat on $10 per week.

Like I said, you may have to move.
Moving is expensive. Moving to the "other 89%" of the world might be even more expensive.
And to be clear, I am not denigrating anyone wanting to live on higher incomes. I am just tired of people acting like living on an income higher than 90% of people is equivalent to eating dog food.
I understand that some people think having only social security is livin' high on the hog. Why, in parts of Pakistan, you could live on pennies a day! Of course moving to Pakistan could be expensive.
Moving to Pakistan would be expensive, but you generally don't need to move to another country to cut down. I currently live in Columbus OH, not Pakistan, and even that is a relatively expensive area in the US (and I do it on about $1,000 per month). On $1,500 your living standard can be high enough that you can usually easily stay in developed countries.

I never said the vast majority could live on $10 per week, I said $100 per month. I have been able to cut it down considerably more, but it takes some time and knowledge that others might not have.

Yes, everyone on this forum is probably living high on the hog.
I think your claim of $100/month (for food, right?) would be better received if you provided a rough breakdown. It would help those folks who DON'T see how to do it.

Something like this:
  • 10 pounds of rice: $8
  • XXX pounds of beans: $yy
  • 3 pounds of butter: $xx
  • 5 pounds of flour: $zz
  • 4 pounds of inexpensive beef (use crock pot): $___
I expect this would take you five minutes or less (because only rough numbers would be needed).

Otherwise the thread can easily turn into a "no you can't", "yes I can" back and forth.

Note that in some VCOL areas, a loaf of sourdough bread at the supermarket runs about $5. You can bake at home for considerably less. And day-old stores are somewhere in the middle. The folks thinking that bread is $5/loaf won't be able to see your point if you don't help them.

FYI: I have the same claim for folks who think that one CAN'T get by on less than $$some-large-number. Showing where the money goes (at least roughly) helps the folks who don't believe you claim a lot more than just repeating the claim with slightly different phrasing.

-Cheers!
If someone was doubting my $40 food budget, I would agree, but $100 is done by such a massive number of people that there isn't much point in bringing out numbers. It's mostly just worthy of an eye roll. And I didn't want to spend 5 minutes on a extremely rough response because then someone could easily respond "ha! The food you listed is lacking in several nutrients" or "ha! Item x is 50% more expensive where I shop".

But fair enough. Let's assume a 2000 calorie diet...

If I went to the Kroger right near me right now, with no sales or deals, not counting cashback:

42 oz oats = 4,500 cal = $2.69 = 1,670 cal/$
1 lb peanut butter = 2,520 cal = $1.50 = 1,680 cal/$
2 lb pinto beans = 2,340 cal = $1.69 = 1,380 cal/$
2 lb brown rice = 3,200 cal = $1.49 = 2,150 cal/$

Let's say you split each of those equally for 1,500 calories (375 each) - that comes out to about $0.87 per day.

For the rest of the 500 calories, some ideas that look decent: 6 oz frozen broccoli ($0.47), a banana ($0.27), a large egg ($0.15), a quarter pound of baby carrots ($0.25), a cup and a half of milk ($0.23).

Final number: $2.24 per day, ~$68 per month. Plus is probably healthier than most people eat - well over the RDA on almost everything when I plug into cronometer, and the few below are pretty easy and cheap to get, but I don't want to redo the numbers (like replacing some of the rice with canola oil for omega-3 fatty acids).

My place is probably cheaper than many others, but 50% more expensive is probably rare. Plus there are areas to cut/replace (replacing brown rice with cheaper rice, adding some canola oil, cutting back on calories, changing the random foods I added to cheaper alternatives), and there's no reason to avoid sales/cashback/deals.
Thank you.

For reference, I think this works out okay even in VHCOL areas.

My local Raley's shows:

42 oz of store brand oats: $3.99.
16 oz store brand peanut butter: $2.58
2 lb pinto beans: $2.00 (buy a 5 lb bag for $4.98).
2 lb store brand brown rice: $4.00 (two 1 lb bags @ $2 each. Can probably find a larger/cheaper bag at a nearby Asian store)

So I'm seeing this in a VHCOL area at a not-cheap store (but not Whole Foods!) as more, but still workable.

And, as you say, one can pay attention to sales. In my area Safeway is another alternative:

42 oz of store brand oats: $3.99
16 oz store brand peanut buffer: $2.79
Pinto beans are surprisingly expensive here (1 lb for $1.99, 10 lbs for $16.99)
2 lb store brand brown rice: $2.20 (buy the five pound bag for $5.49)


And the local Wal-Mart I believe comes in at almost exactly what you posted:

42 oz of store brand oats: $2.46
16 oz store brand peanut butter: $1.72 (actually 18 oz so a bit less per pound)
2 lbs pinto beans: $1.72 (4 pounds for $3.44)
2 lb store brand brown rice: $1.44

So your numbers look quite realistic even for VHCOL areas.

Eggs run around $2/dozen, so one egg is around $0.15 here, too.
skierincolorado
Posts: 2377
Joined: Sat Mar 21, 2020 10:56 am

Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by skierincolorado »

The numbers above are nicer, but I can confirm I've lived off $100/month in groceries. Brocolli, lentils, sausage, cereal, milk, eggs, carrots etc. were staples. Chicken would have been cheaper. Now it's more like $250/month plus $50-100/month eating out. I enjoy eating out so I don't mind that, but the groceries would like to get back under $200.
delamer
Posts: 17459
Joined: Tue Feb 08, 2011 5:13 pm

Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by delamer »

pepys wrote: Mon Aug 02, 2021 4:47 pm
delamer wrote: Mon Aug 02, 2021 4:12 pm
pepys wrote: Mon Aug 02, 2021 2:59 pm
JoeRetire wrote: Mon Aug 02, 2021 2:10 pm
pepys wrote: Mon Aug 02, 2021 1:56 pm No. It is extremely easy for people without health issues and not living in an absurdly expensive place to eat regular food for less than $100 a month. I do about $40 a month. This forum is massively out of touch with how the vast majority of people live.
The vast majority of people cannot eat on $10 per week.

Like I said, you may have to move.
Moving is expensive. Moving to the "other 89%" of the world might be even more expensive.
And to be clear, I am not denigrating anyone wanting to live on higher incomes. I am just tired of people acting like living on an income higher than 90% of people is equivalent to eating dog food.
I understand that some people think having only social security is livin' high on the hog. Why, in parts of Pakistan, you could live on pennies a day! Of course moving to Pakistan could be expensive.
Moving to Pakistan would be expensive, but you generally don't need to move to another country to cut down. I currently live in Columbus OH, not Pakistan, and even that is a relatively expensive area in the US (and I do it on about $1,000 per month). On $1,500 your living standard can be high enough that you can usually easily stay in developed countries.

I never said the vast majority could live on $10 per week, I said $100 per month. I have been able to cut it down considerably more, but it takes some time and knowledge that others might not have.

Yes, everyone on this forum is probably living high on the hog.
What expenses are included that $1,000/month?
Rent, food, internet, utilities, insurance, phone, whatever else I spent over the last year. Does not include health insurance since that is with my employer, but I also live in a very expensive place to be close to my employer - if I was retired, I suspect my expenses would be lower.
Thanks.

To me, its somewhat misleading to ignore the value/cost of employer paid health insurance when talking about a budget, or to only include what you contribute out-of-pocket to a health insurance premium. So you’d have to add another $500/month minimum for health insurance, assuming you are single.

Or some people — not you — have a fully paid for home. That obviously involves some cost for property taxes and maintenance, but means no rent or mortgage. So their budget also is somewhat misleading.

Anyway, it’s important to understand what underlies the numbers.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
pepys
Posts: 174
Joined: Mon Nov 12, 2018 9:34 am

Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by pepys »

MarkRoulo wrote: Mon Aug 02, 2021 5:12 pm Thank you.

For reference, I think this works out okay even in VHCOL areas.

My local Raley's shows:

42 oz of store brand oats: $3.99.
16 oz store brand peanut butter: $2.58
2 lb pinto beans: $2.00 (buy a 5 lb bag for $4.98).
2 lb store brand brown rice: $4.00 (two 1 lb bags @ $2 each. Can probably find a larger/cheaper bag at a nearby Asian store)

So I'm seeing this in a VHCOL area at a not-cheap store (but not Whole Foods!) as more, but still workable.

And, as you say, one can pay attention to sales. In my area Safeway is another alternative:

42 oz of store brand oats: $3.99
16 oz store brand peanut buffer: $2.79
Pinto beans are surprisingly expensive here (1 lb for $1.99, 10 lbs for $16.99)
2 lb store brand brown rice: $2.20 (buy the five pound bag for $5.49)


And the local Wal-Mart I believe comes in at almost exactly what you posted:

42 oz of store brand oats: $2.46
16 oz store brand peanut butter: $1.72 (actually 18 oz so a bit less per pound)
2 lbs pinto beans: $1.72 (4 pounds for $3.44)
2 lb store brand brown rice: $1.44

So your numbers look quite realistic even for VHCOL areas.

Eggs run around $2/dozen, so one egg is around $0.15 here, too.
Interesting! Wild how much some of those vary. I would have guessed that Safeway would be closer to Kroger/Walmart.
pepys
Posts: 174
Joined: Mon Nov 12, 2018 9:34 am

Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by pepys »

delamer wrote: Mon Aug 02, 2021 6:03 pm Thanks.

To me, its somewhat misleading to ignore the value/cost of employer paid health insurance when talking about a budget, or to only include what you contribute out-of-pocket to a health insurance premium. So you’d have to add another $500/month minimum for health insurance, assuming you are single.

Or some people — not you — have a fully paid for home. That obviously involves some cost for property taxes and maintenance, but means no rent or mortgage. So their budget also is somewhat misleading.

Anyway, it’s important to understand what underlies the numbers.
That's a fair point. I definitely should have mentioned that at first. I'm not sure how I would include it in an actual number though, I have very little knowledge on how much it would cost if I had to purchase it.

Although this discussion was about someone retired on an income barely above the poverty line. They would presumably get subsidized. And, in my case, I would be able to cut what is by far my biggest expense (rent).
Kinkajou82
Posts: 240
Joined: Wed Apr 28, 2021 2:15 pm

Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by Kinkajou82 »

MarkRoulo wrote: Mon Aug 02, 2021 5:12 pm
pepys wrote: Mon Aug 02, 2021 4:42 pm
MarkRoulo wrote: Mon Aug 02, 2021 3:24 pm
pepys wrote: Mon Aug 02, 2021 2:59 pm
JoeRetire wrote: Mon Aug 02, 2021 2:10 pm
The vast majority of people cannot eat on $10 per week.


Moving is expensive. Moving to the "other 89%" of the world might be even more expensive.


I understand that some people think having only social security is livin' high on the hog. Why, in parts of Pakistan, you could live on pennies a day! Of course moving to Pakistan could be expensive.
Moving to Pakistan would be expensive, but you generally don't need to move to another country to cut down. I currently live in Columbus OH, not Pakistan, and even that is a relatively expensive area in the US (and I do it on about $1,000 per month). On $1,500 your living standard can be high enough that you can usually easily stay in developed countries.

I never said the vast majority could live on $10 per week, I said $100 per month. I have been able to cut it down considerably more, but it takes some time and knowledge that others might not have.

Yes, everyone on this forum is probably living high on the hog.
I think your claim of $100/month (for food, right?) would be better received if you provided a rough breakdown. It would help those folks who DON'T see how to do it.

Something like this:
  • 10 pounds of rice: $8
  • XXX pounds of beans: $yy
  • 3 pounds of butter: $xx
  • 5 pounds of flour: $zz
  • 4 pounds of inexpensive beef (use crock pot): $___
I expect this would take you five minutes or less (because only rough numbers would be needed).

Otherwise the thread can easily turn into a "no you can't", "yes I can" back and forth.

Note that in some VCOL areas, a loaf of sourdough bread at the supermarket runs about $5. You can bake at home for considerably less. And day-old stores are somewhere in the middle. The folks thinking that bread is $5/loaf won't be able to see your point if you don't help them.

FYI: I have the same claim for folks who think that one CAN'T get by on less than $$some-large-number. Showing where the money goes (at least roughly) helps the folks who don't believe you claim a lot more than just repeating the claim with slightly different phrasing.

-Cheers!
If someone was doubting my $40 food budget, I would agree, but $100 is done by such a massive number of people that there isn't much point in bringing out numbers. It's mostly just worthy of an eye roll. And I didn't want to spend 5 minutes on a extremely rough response because then someone could easily respond "ha! The food you listed is lacking in several nutrients" or "ha! Item x is 50% more expensive where I shop".

But fair enough. Let's assume a 2000 calorie diet...

If I went to the Kroger right near me right now, with no sales or deals, not counting cashback:

42 oz oats = 4,500 cal = $2.69 = 1,670 cal/$
1 lb peanut butter = 2,520 cal = $1.50 = 1,680 cal/$
2 lb pinto beans = 2,340 cal = $1.69 = 1,380 cal/$
2 lb brown rice = 3,200 cal = $1.49 = 2,150 cal/$

Let's say you split each of those equally for 1,500 calories (375 each) - that comes out to about $0.87 per day.

For the rest of the 500 calories, some ideas that look decent: 6 oz frozen broccoli ($0.47), a banana ($0.27), a large egg ($0.15), a quarter pound of baby carrots ($0.25), a cup and a half of milk ($0.23).

Final number: $2.24 per day, ~$68 per month. Plus is probably healthier than most people eat - well over the RDA on almost everything when I plug into cronometer, and the few below are pretty easy and cheap to get, but I don't want to redo the numbers (like replacing some of the rice with canola oil for omega-3 fatty acids).

My place is probably cheaper than many others, but 50% more expensive is probably rare. Plus there are areas to cut/replace (replacing brown rice with cheaper rice, adding some canola oil, cutting back on calories, changing the random foods I added to cheaper alternatives), and there's no reason to avoid sales/cashback/deals.
Thank you.

For reference, I think this works out okay even in VHCOL areas.

My local Raley's shows:

42 oz of store brand oats: $3.99.
16 oz store brand peanut butter: $2.58
2 lb pinto beans: $2.00 (buy a 5 lb bag for $4.98).
2 lb store brand brown rice: $4.00 (two 1 lb bags @ $2 each. Can probably find a larger/cheaper bag at a nearby Asian store)

So I'm seeing this in a VHCOL area at a not-cheap store (but not Whole Foods!) as more, but still workable.

And, as you say, one can pay attention to sales. In my area Safeway is another alternative:

42 oz of store brand oats: $3.99
16 oz store brand peanut buffer: $2.79
Pinto beans are surprisingly expensive here (1 lb for $1.99, 10 lbs for $16.99)
2 lb store brand brown rice: $2.20 (buy the five pound bag for $5.49)


And the local Wal-Mart I believe comes in at almost exactly what you posted:

42 oz of store brand oats: $2.46
16 oz store brand peanut butter: $1.72 (actually 18 oz so a bit less per pound)
2 lbs pinto beans: $1.72 (4 pounds for $3.44)
2 lb store brand brown rice: $1.44

So your numbers look quite realistic even for VHCOL areas.

Eggs run around $2/dozen, so one egg is around $0.15 here, too.
Can confirm that even in a VHCOL this is probably doable. Our household is a family of four and we're getting fat at a $600 monthly "household" budget target that is mostly food and some household incidentals. We're definitely not sticking to that 100% but I can easily see if we got serious we could really hit a lower per person food budget and still keep eating well.

...Though I should probably learn how to cook myself so I'm not relying on other people being as good at home economics as I am at reading the bogleheads forum...
pasadena
Posts: 2337
Joined: Sat Jul 02, 2016 1:23 am
Location: PNW

Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by pasadena »

MarkRoulo wrote: Mon Aug 02, 2021 5:12 pm
pepys wrote: Mon Aug 02, 2021 4:42 pm
MarkRoulo wrote: Mon Aug 02, 2021 3:24 pm
pepys wrote: Mon Aug 02, 2021 2:59 pm
JoeRetire wrote: Mon Aug 02, 2021 2:10 pm
The vast majority of people cannot eat on $10 per week.


Moving is expensive. Moving to the "other 89%" of the world might be even more expensive.


I understand that some people think having only social security is livin' high on the hog. Why, in parts of Pakistan, you could live on pennies a day! Of course moving to Pakistan could be expensive.
Moving to Pakistan would be expensive, but you generally don't need to move to another country to cut down. I currently live in Columbus OH, not Pakistan, and even that is a relatively expensive area in the US (and I do it on about $1,000 per month). On $1,500 your living standard can be high enough that you can usually easily stay in developed countries.

I never said the vast majority could live on $10 per week, I said $100 per month. I have been able to cut it down considerably more, but it takes some time and knowledge that others might not have.

Yes, everyone on this forum is probably living high on the hog.
I think your claim of $100/month (for food, right?) would be better received if you provided a rough breakdown. It would help those folks who DON'T see how to do it.

Something like this:
  • 10 pounds of rice: $8
  • XXX pounds of beans: $yy
  • 3 pounds of butter: $xx
  • 5 pounds of flour: $zz
  • 4 pounds of inexpensive beef (use crock pot): $___
I expect this would take you five minutes or less (because only rough numbers would be needed).

Otherwise the thread can easily turn into a "no you can't", "yes I can" back and forth.

Note that in some VCOL areas, a loaf of sourdough bread at the supermarket runs about $5. You can bake at home for considerably less. And day-old stores are somewhere in the middle. The folks thinking that bread is $5/loaf won't be able to see your point if you don't help them.

FYI: I have the same claim for folks who think that one CAN'T get by on less than $$some-large-number. Showing where the money goes (at least roughly) helps the folks who don't believe you claim a lot more than just repeating the claim with slightly different phrasing.

-Cheers!
If someone was doubting my $40 food budget, I would agree, but $100 is done by such a massive number of people that there isn't much point in bringing out numbers. It's mostly just worthy of an eye roll. And I didn't want to spend 5 minutes on a extremely rough response because then someone could easily respond "ha! The food you listed is lacking in several nutrients" or "ha! Item x is 50% more expensive where I shop".

But fair enough. Let's assume a 2000 calorie diet...

If I went to the Kroger right near me right now, with no sales or deals, not counting cashback:

42 oz oats = 4,500 cal = $2.69 = 1,670 cal/$
1 lb peanut butter = 2,520 cal = $1.50 = 1,680 cal/$
2 lb pinto beans = 2,340 cal = $1.69 = 1,380 cal/$
2 lb brown rice = 3,200 cal = $1.49 = 2,150 cal/$

Let's say you split each of those equally for 1,500 calories (375 each) - that comes out to about $0.87 per day.

For the rest of the 500 calories, some ideas that look decent: 6 oz frozen broccoli ($0.47), a banana ($0.27), a large egg ($0.15), a quarter pound of baby carrots ($0.25), a cup and a half of milk ($0.23).

Final number: $2.24 per day, ~$68 per month. Plus is probably healthier than most people eat - well over the RDA on almost everything when I plug into cronometer, and the few below are pretty easy and cheap to get, but I don't want to redo the numbers (like replacing some of the rice with canola oil for omega-3 fatty acids).

My place is probably cheaper than many others, but 50% more expensive is probably rare. Plus there are areas to cut/replace (replacing brown rice with cheaper rice, adding some canola oil, cutting back on calories, changing the random foods I added to cheaper alternatives), and there's no reason to avoid sales/cashback/deals.
Thank you.

For reference, I think this works out okay even in VHCOL areas.

My local Raley's shows:

42 oz of store brand oats: $3.99.
16 oz store brand peanut butter: $2.58
2 lb pinto beans: $2.00 (buy a 5 lb bag for $4.98).
2 lb store brand brown rice: $4.00 (two 1 lb bags @ $2 each. Can probably find a larger/cheaper bag at a nearby Asian store)

So I'm seeing this in a VHCOL area at a not-cheap store (but not Whole Foods!) as more, but still workable.

And, as you say, one can pay attention to sales. In my area Safeway is another alternative:

42 oz of store brand oats: $3.99
16 oz store brand peanut buffer: $2.79
Pinto beans are surprisingly expensive here (1 lb for $1.99, 10 lbs for $16.99)
2 lb store brand brown rice: $2.20 (buy the five pound bag for $5.49)


And the local Wal-Mart I believe comes in at almost exactly what you posted:

42 oz of store brand oats: $2.46
16 oz store brand peanut butter: $1.72 (actually 18 oz so a bit less per pound)
2 lbs pinto beans: $1.72 (4 pounds for $3.44)
2 lb store brand brown rice: $1.44

So your numbers look quite realistic even for VHCOL areas.

Eggs run around $2/dozen, so one egg is around $0.15 here, too.
Yeah, well, I'm going to work longer so I can eat better than just oats, peanut butter, rice and beans. That's just a step above dog food to me. Yes, it's feasible, but how many people actually want to live like this?

So the takeaway is, if you retire at the top of a bubble with less money saved than what is usually advised, you can survive by eating rice and beans. Thanks.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by delamer »

pepys wrote: Mon Aug 02, 2021 7:09 pm
delamer wrote: Mon Aug 02, 2021 6:03 pm Thanks.

To me, its somewhat misleading to ignore the value/cost of employer paid health insurance when talking about a budget, or to only include what you contribute out-of-pocket to a health insurance premium. So you’d have to add another $500/month minimum for health insurance, assuming you are single.

Or some people — not you — have a fully paid for home. That obviously involves some cost for property taxes and maintenance, but means no rent or mortgage. So their budget also is somewhat misleading.

Anyway, it’s important to understand what underlies the numbers.
That's a fair point. I definitely should have mentioned that at first. I'm not sure how I would include it in an actual number though, I have very little knowledge on how much it would cost if I had to purchase it.

Although this discussion was about someone retired on an income barely above the poverty line. They would presumably get subsidized. And, in my case, I would be able to cut what is by far my biggest expense (rent).
However you feel politically about government support for housing or health insurance for the low income, I’d also argue that it would be unfair to claim (again not pointing at you) that someone was managing on $1,000 at month if they got a rent subsidy and/or Medicaid. That means that that person’s budget doesn’t reflect their full costs.

(If you are interested, you can go to your state’s ACA marketplace to get a health insurance premium estimate.)
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by Kinkajou82 »

pasadena wrote: Mon Aug 02, 2021 7:57 pm Yeah, well, I'm going to work longer so I can eat better than just oats, peanut butter, rice and beans. That's just a step above dog food to me. Yes, it's feasible, but how many people actually want to live like this?
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by Ckprocker »

I plan on starting (key word starting) my retirement at 5% adjusted each year for inflation and here’s why:
Realistically, spending varies year to year. When returns are good, I will take more and when the recessions come along, I’ll take less.

We want to spend much more in our early years, in our go-go years, say 65 to 75, maybe to 80.
Spending goes down for most in retirement. There are many studies that confirm this.

We have no Heirs and no need to have a big pile of money if we do make it to our 90’s.

I plan to re-retire every year and withdraw accordingly.

These types of debates are more academic in nature than what actually happens in real life. Good discussion, but there are so many other factors to consider outside of the numbers on a calculated data sheet.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by retireIn2020 »

If I'm comprehending the original post by the OP, I understand the thought to be that; we are expecting a decade of market crashes (low equity returns) along with a decade of of low bond returns (interest rates from near zero can only rise)!! And that could be devastating to new retirees. Somebody correct me here since I only scanned all of the posts.

If I'm correct about the OP's thought, my response is; With negative real returns in Bonds (mostly controlled by the fed), where do think investors will place their funds? Right now I think the answer is equities (TINA), in 2022-2023 it may be Bonds!

And I may be out of touch, After swimming in the pool and Hiking today, my appetizer tonight was IDK around $25 two types salsa's, guacamole (mild and medium), and tortilla chips all fresh made from the local grocier. I suppose in a downturn I could fry the chips and acquire some avocado's, tomatoes, onion, peppers lime and well, you get the idea...

Glad I saved for 40 years so hopefully I won't have to make my own salsa and chips!
Last edited by retireIn2020 on Tue Aug 03, 2021 12:08 am, edited 1 time in total.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by jschner »

Bonds are putting out almost nothing these days, especially compared to inflation. Bond yields may even drop lower if we get deflation so looking forward, Personally, I am not optimistic about the future prospect of bonds being any better than what they already are today.

With that, think about replacing Bonds with an ETF. I think I was shown the door when I recently asked questions about QYLD, but for the $50k target income, it appears like it would work well for this situation. Can't run it through the lost decade, but it made it through the end of 2018 and COVID drop at producing covered call premium income. Once you buy the shares, it has put out .15 to .24 per share each month in mostly covered call premiums and 1-2% dividends, despite going up or down. The average payout is about .19/share overall, goes up slightly to .20 when QQQ is going down, more volatile, or flat growth which is close to what happened in 2000. RYLD might be even better using the Russel 2000 because it has some growth, but it is only two years old. Other possible benefits, if you pull income only from QYLD, due to ROC, it is tax free income for around 12 years, until it reaches $0 on the cost basis. Then the income is taxed, or if you sell, that ROC amount sold is taxed, unless it is in a ROTH. Also as it reinvests it buys more shares which generates even more CC income which may help the $50k keep up with inflation. Plus some extra headroom if more income is needed.

https://www.portfoliovisualizer.com/bac ... ion2_3=100

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Last edited by jschner on Mon Aug 02, 2021 11:56 pm, edited 2 times in total.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by ElJefeDelQueso »

invest2bfree wrote: Sun Aug 01, 2021 12:48 am https://www.portfoliovisualizer.com/bac ... tion2_2=40


It is really a sad state of affairs if we are going to repeat the last 20 years especially with low yields going forward.

If I plan to withdraw $50,000 with a starting total of $1M ran out of money in 2016 for 100% S&P 500 allocation.

60% stocks and 40% cash barely made it with only $197,096 as the remainder. I used cash because of the low yields we are experiencing. I do not believe the bond markets returns of last 20 years cannot be repeated.
Wellington winds up with $1.4 million.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by stocknoob4111 »

Wow, you're right... $1.4M for Wellington Investor.. it has a 60/30, so is the performance due to active management?
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retireIn2020
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by retireIn2020 »

ElJefeDelQueso wrote: Mon Aug 02, 2021 11:53 pm
invest2bfree wrote: Sun Aug 01, 2021 12:48 am https://www.portfoliovisualizer.com/bac ... tion2_2=40


It is really a sad state of affairs if we are going to repeat the last 20 years especially with low yields going forward.

If I plan to withdraw $50,000 with a starting total of $1M ran out of money in 2016 for 100% S&P 500 allocation.

60% stocks and 40% cash barely made it with only $197,096 as the remainder. I used cash because of the low yields we are experiencing. I do not believe the bond markets returns of last 20 years cannot be repeated.
Wellington winds up with $1.4 million.
No offence but I think you missed the point.

Wellington enjoyed interest rate yields dropping consistently the entire 20 year period. Do you think they can drop the next 20?
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by vanbogle59 »

pepys wrote: Mon Aug 02, 2021 11:36 pm the large majority of people eat for less than $100 per day.
Assuming you actually mean "per month", I agree with you.
Why would anyone in that circumstance care about the topic of this thread?

OP: "I plan to withdraw $50,000 with a starting total of $1M ran out of money in 2016 for 100% S&P 500 allocation."
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by sf_tech_saver »

Save enough to live off the dividends or spend eternity calculating :)
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by ElJefeDelQueso »

retireIn2020 wrote: Tue Aug 03, 2021 12:21 am
ElJefeDelQueso wrote: Mon Aug 02, 2021 11:53 pm
invest2bfree wrote: Sun Aug 01, 2021 12:48 am https://www.portfoliovisualizer.com/bac ... tion2_2=40


It is really a sad state of affairs if we are going to repeat the last 20 years especially with low yields going forward.

If I plan to withdraw $50,000 with a starting total of $1M ran out of money in 2016 for 100% S&P 500 allocation.

60% stocks and 40% cash barely made it with only $197,096 as the remainder. I used cash because of the low yields we are experiencing. I do not believe the bond markets returns of last 20 years cannot be repeated.
Wellington winds up with $1.4 million.
No offence but I think you missed the point.

Wellington enjoyed interest rate yields dropping consistently the entire 20 year period. Do you think they can drop the next 20?
No, I mean just put in small cap, value, anything that didn't get slammed by the tech/internet crash like the s&p500 did, and inject that sequence-of-returns bomb right at the beginning of retirement, and you did fine. 100% s&p600 winds up north of $3 million.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by pepys »

vanbogle59 wrote: Tue Aug 03, 2021 12:31 am
pepys wrote: Mon Aug 02, 2021 11:36 pm the large majority of people eat for less than $100 per day.
Assuming you actually mean "per month", I agree with you.
Why would anyone in that circumstance care about the topic of this thread?

OP: "I plan to withdraw $50,000 with a starting total of $1M ran out of money in 2016 for 100% S&P 500 allocation."
I did, yes. I doubt they would, but I don't think that's a good reason to be okay with people comparing their lifestyle to eating dog food.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by seajay »

milktoast wrote: Mon Aug 02, 2021 1:16 pm
galawdawg wrote: Sun Aug 01, 2021 11:51 am And as I pointed out earlier in the tread, even with a 5% withdrawal rate adjusted annually for inflation, the 2000 hypothetical retiree invested 60/40 in Vanguard Total Stock Index and Vanguard Total Bond Index would today still have close to $600k in their portfolio.
Thanks. That seems more realistic. But it's still grim. The inflation adjusted balance is closer to $360k. So the spending power of the account has dropped by 2/3 over 21 years. Leaving roughly 7 years of spending. So looks like 2000 is on track to barely make it to 30 years at 5% SWR.
Grimmer still is that with Covid a 65 year old 2000 retiree is perhaps also on track to barely make it to 30 years.
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Re: Retiring in 2000 withdrawing fixed 5% ran out of money in 2016

Post by LadyGeek »

I removed several contentious posts discussing socioeconomic status vs. lifestyle. This thread has run its course and is locked (topic exhausted). See: Locked Topics
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