Bogleheads at/Aiming For 2% SWR
Bogleheads at/Aiming For 2% SWR
I don’t think I’ve ever seen a thread specifically focused on Bogleheads who have achieved or aspire to a 2% (or even lower) withdrawal rate/savings at 50x annual spending. Although this poll is from another forum, it suggests that we may be a larger subset than known:
https://www.early-retirement.org/forums ... 14017.html
Is 2% folly? Belt AND suspenders? Would it be a personal tragedy to save that much and a 1929 arrives and all that accumulation goes to money heaven? Of if, as many think, we’re headed for a 1966-1981 era of inflated/declining real asset values, might 50x/2% be the solution for millions of Boomers retiring into it?
https://www.early-retirement.org/forums ... 14017.html
Is 2% folly? Belt AND suspenders? Would it be a personal tragedy to save that much and a 1929 arrives and all that accumulation goes to money heaven? Of if, as many think, we’re headed for a 1966-1981 era of inflated/declining real asset values, might 50x/2% be the solution for millions of Boomers retiring into it?
Last edited by Leesbro63 on Mon May 23, 2022 6:38 am, edited 1 time in total.
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Re: Bogleheads At or Aiming For 2% SWR
Sure - it might be a solution for those (relatively few) who can do it.Leesbro63 wrote: ↑Mon May 23, 2022 6:16 am I don’t think I’ve ever seen a thread specifically focused on Bogleheads who have achieved or aspire to a 2% (or even lower) withdrawal rate/savings at 100x annual spending. Although this poll is from another forum, it suggests that we may be a larger subset than known:
https://www.early-retirement.org/forums ... 14017.html
Is 2% folly? Belt AND suspenders? Would it be a personal tragedy to save that much and a 1929 arrives and all that accumulation goes to money heaven? Of if, as many think, we’re headed for a 1966-1981 era of inflated/declining real asset values, might 100x/2% be the solution for millions of Boomers retiring into it?
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Re: Bogleheads at/Aiming For 2% SWR
For us it just happened. We didn’t aim for anything. Retirement was not a financial decision.
When we were accumulating, a “number” wasn’t a thing.
When we were accumulating, a “number” wasn’t a thing.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
Re: Bogleheads at/Aiming For 2% SWR
OP,
2% is 50X..100X would be 1%
I think 2% is fine to strive for, even if 1929 reoccured , I think these #s would hold up. Not so much for the 25X
2% is 50X..100X would be 1%
I think 2% is fine to strive for, even if 1929 reoccured , I think these #s would hold up. Not so much for the 25X
Re: Bogleheads at/Aiming For 2% SWR
How low can bogleheads go? Over the years bogleheads SWR keeps getting lower and lower.
Only on bogleheads...
Only on bogleheads...
Last edited by lostdog on Mon May 23, 2022 6:39 am, edited 1 time in total.
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Re: Bogleheads at/Aiming For 2% SWR
Deleted/error/duplicate
Last edited by Leesbro63 on Mon May 23, 2022 6:43 am, edited 1 time in total.
Re: Bogleheads at/Aiming For 2% SWR
Same here.
Meet my pet, Peeve, who loves to convert non-acronyms into acronyms: FED, ROTH, CASH, IVY, ...
Re: Bogleheads at/Aiming For 2% SWR
HA!
If everything went completely south (1929) your expenses would naturally drop as well. Do we really think the stock market loses 85% and prices for everything remains the same or higher. Employment and demand would fall thru the floor, so we'd be looking at high deflation. But who knows
Re: Bogleheads at/Aiming For 2% SWR
If 1966-1981 happens again, 3.8% is the solution. 2% is almost 2x as much money as you need. If you like working and have nothing you want to buy you end up with 50x. That is actually a decent chunk of people who set retirement dates based on things like age (gonna work to 55 or the kids out oof college) instead of assets. Or if you have a pension you can end up with weird cases where you don't have enough to retire until it kicks in and then you have an excess....Leesbro63 wrote: ↑Mon May 23, 2022 6:16 am
Is 2% folly? Belt AND suspenders? Would it be a personal tragedy to save that much and a 1929 arrives and all that accumulation goes to money heaven? Of if, as many think, we’re headed for a 1966-1981 era of inflated/declining real asset values, might 50x/2% be the solution for millions of Boomers retiring into it?
Re: Bogleheads at/Aiming For 2% SWR
Pretty much how we feel as well, good post.randomguy wrote: ↑Mon May 23, 2022 6:50 amIf 1966-1981 happens again, 3.8% is the solution. 2% is almost 2x as much money as you need. If you like working and have nothing you want to buy you end up with 50x. That is actually a decent chunk of people who set retirement dates based on things like age (gonna work to 55 or the kids out oof college) instead of assets. Or if you have a pension you can end up with weird cases where you don't have enough to retire until it kicks in and then you have an excess....Leesbro63 wrote: ↑Mon May 23, 2022 6:16 am
Is 2% folly? Belt AND suspenders? Would it be a personal tragedy to save that much and a 1929 arrives and all that accumulation goes to money heaven? Of if, as many think, we’re headed for a 1966-1981 era of inflated/declining real asset values, might 50x/2% be the solution for millions of Boomers retiring into it?
Re: Bogleheads at/Aiming For 2% SWR
I agree that with so many Americans, especially retiring Boomers, invested via IRAs and 401Ks, the Fed is unlikely to let things get too bad. But then the price of that might be 1966-81 inflation, which in many ways, was just as bad, but in slow-motion, for those living off invested assets.59Gibson wrote: ↑Mon May 23, 2022 6:46 amHA!
If everything went completely south (1929) your expenses would naturally drop as well. Do we really think the stock market loses 85% and prices for everything remains the same or higher. Employment and demand would fall thru the floor, so we'd be looking at high deflation. But who knows
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Re: Bogleheads at/Aiming For 2% SWR
I"m at 1% (and voted in that poll).Leesbro63 wrote: ↑Mon May 23, 2022 6:16 am Is 2% folly? Belt AND suspenders? Would it be a personal tragedy to save that much and a 1929 arrives and all that accumulation goes to money heaven? Of if, as many think, we’re headed for a 1966-1981 era of inflated/declining real asset values, might 50x/2% be the solution for millions of Boomers retiring into it?
It just sort of happened. I hit my 4% goal, work wasn't too bad so I did an extra two years and kept saving. I retired in 2016 at 47 so I left over 90% of my money in the market. I found a side gig I liked. The money sort of doubled.
It's probably belts, suspenders, staples, glue gun, and an extra pair of pants. The 4% "rule" survived 1929 and almost survived 1966 @ 75/25 for a 30 year retirement.
I don't think we're headed for a 1966 repeat, but that's just my opinion.
Everyone gets to roll the dice and take their chances. The future is unknown, and one just gets to trade off time for money until they think they have "enough" given their circumstances (age, health, backup plans).
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Re: Bogleheads at/Aiming For 2% SWR
This seems like the way you end up there, rather than working until you hit a number. Retiring in your 40s with 25x is not desirable for some and then, by the time you are ready to retire, you might end up having more.randomguy wrote: ↑Mon May 23, 2022 6:50 amIf 1966-1981 happens again, 3.8% is the solution. 2% is almost 2x as much money as you need. If you like working and have nothing you want to buy you end up with 50x. That is actually a decent chunk of people who set retirement dates based on things like age (gonna work to 55 or the kids out oof college) instead of assets. Or if you have a pension you can end up with weird cases where you don't have enough to retire until it kicks in and then you have an excess....Leesbro63 wrote: ↑Mon May 23, 2022 6:16 am
Is 2% folly? Belt AND suspenders? Would it be a personal tragedy to save that much and a 1929 arrives and all that accumulation goes to money heaven? Of if, as many think, we’re headed for a 1966-1981 era of inflated/declining real asset values, might 50x/2% be the solution for millions of Boomers retiring into it?
It seems like a variable withdrawal method like VPW (perhaps tweaked to be as conservative as desired) or ABW can be a good "solution" here to make sure the money is used to good ends. For someone who does not want to consume more, giving the difference between what the withdrawal method tells you to withdraw and what you actually spend to heirs and/or charity while still alive could be rewarding. Many possible approaches, though, for those who end up with 50x or more.
Global Market Portfolio + modest tilt towards volatility (80/20->60/40 as approach FI) + modest tilt away from exchange rate risk (80% global+20% U.S. stocks; currency-hedge bonds) + tax optimization
Re: Bogleheads at/Aiming For 2% SWR
This is very topical - As it happens, I just bought a copy of the Pralana Retirement Calculator and carefully entered all of our data. The highest withdrawal rate that it predicts is about 2.5% for a couple of years (before our pensions kick in). After that, the withdrawal rate is projected to be under 2%. We are now trying to figure out what more we should be spending on
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Re: Bogleheads at/Aiming For 2% SWR
Same, didn't even start saving in retirement accounts (or any long term saving) until our late 30s. Seemed to make sense to put our savings there for the tax advantages. Never having been big spenders, when pay went up savings went up. Pensions and SS will end-up likely being enough to cover most spending. I am mostly managing a pension fund for our kids now.
Retired in our 50s and so far total assets have increased by about 27% over the first 5 years (it looks like inflation has been about 18% over that time), so a real increase of about 9%. Our returns have been about 6% during this time, which would be a 34% gain in 5 years.
So could our net withdrawal rate be approximated by: (34%-27%)/5 = 1.4%
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Re: Bogleheads at/Aiming For 2% SWR
In a (failed) attempt to convince my dear wife to retire, I bought MaxiFi Planner years ago. The software tells me that we can spend a middle 6 digit amount annually on discretionary expenses, and that’s if I live way longer than I’m likely to (family history says she might live forever).
I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working. As a woman in tech, on the negative side, she has vindications to score against the rampant misogyny. On the positive side, she continues to enjoy making lives better by her advocacy, her mentoring, her strategic insight. The money is truly just a way to keep score and validate that she isn’t still being taken advantage of.
Do we have any desire to spend a middle six digit amount annually? I don’t think so. Even if travel opens up safely in the future, there are only so many trips we want to take. Feeding the birds, planting trees and meadows, giving our rescue dogs their “best lives,” supporting local tradespeople are, relatively speaking, minor expenses. Our house’s energy needs are free.
SS and pensions will provide $95k annually. RMDs will kick in shortly, beginning with my relatively small ones. Our taxable portfolio pays out low amounts of dividends, relatively speaking, but still it’s money that has to be re-invested.
Our heirs have made good use of their “advance inheritances.” They will be getting a large “final inheritance,” which makes us smile.
TL;DR. We easily fall in the “under 2%” WR category. There’s no point in spending just to spend. Enjoy what matters to you.
I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working. As a woman in tech, on the negative side, she has vindications to score against the rampant misogyny. On the positive side, she continues to enjoy making lives better by her advocacy, her mentoring, her strategic insight. The money is truly just a way to keep score and validate that she isn’t still being taken advantage of.
Do we have any desire to spend a middle six digit amount annually? I don’t think so. Even if travel opens up safely in the future, there are only so many trips we want to take. Feeding the birds, planting trees and meadows, giving our rescue dogs their “best lives,” supporting local tradespeople are, relatively speaking, minor expenses. Our house’s energy needs are free.
SS and pensions will provide $95k annually. RMDs will kick in shortly, beginning with my relatively small ones. Our taxable portfolio pays out low amounts of dividends, relatively speaking, but still it’s money that has to be re-invested.
Our heirs have made good use of their “advance inheritances.” They will be getting a large “final inheritance,” which makes us smile.
TL;DR. We easily fall in the “under 2%” WR category. There’s no point in spending just to spend. Enjoy what matters to you.
I get the FI part but not the RE part of FIRE.
Re: Bogleheads at/Aiming For 2% SWR
I think there is a fair probability that if 3.0% does not work (one runs out of money before expiring), 2.0% may not work either. Said another way, 2.0% might give a false sense of security, while at the same time causing one to work many years longer than is actually necessary and/or spending a lot less than they otherwise would during retirement.
Real Knowledge Comes Only From Experience
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Re: Bogleheads at/Aiming For 2% SWR
Personally, I don't look at this as a constant drive to get one's SWR lower. I look at the question as can I support my current/base/desired lifestyle with an 2% WR with the option to spend more when desired. To me the question is about having options. I have a thread asking a similar question about the reasonability of living off SS and dividends and does that allow a retiree to invest in a more aggressive AA.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. |
Run, You Clever Boy! [9085]
Re: Bogleheads at/Aiming For 2% SWR
"I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working."TomatoTomahto wrote: ↑Mon May 23, 2022 7:42 am In a (failed) attempt to convince my dear wife to retire, I bought MaxiFi Planner years ago. The software tells me that we can spend a middle 6 digit amount annually on discretionary expenses, and that’s if I live way longer than I’m likely to (family history says she might live forever).
I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working. As a woman in tech, on the negative side, she has vindications to score against the rampant misogyny. On the positive side, she continues to enjoy making lives better by her advocacy, her mentoring, her strategic insight. The money is truly just a way to keep score and validate that she isn’t still being taken advantage of.
Do we have any desire to spend a middle six digit amount annually? I don’t think so. Even if travel opens up safely in the future, there are only so many trips we want to take. Feeding the birds, planting trees and meadows, giving our rescue dogs their “best lives,” supporting local tradespeople are, relatively speaking, minor expenses. Our house’s energy needs are free.
SS and pensions will provide $95k annually. RMDs will kick in shortly, beginning with my relatively small ones. Our taxable portfolio pays out low amounts of dividends, relatively speaking, but still it’s money that has to be re-invested.
Our heirs have made good use of their “advance inheritances.” They will be getting a large “final inheritance,” which makes us smile.
TL;DR. We easily fall in the “under 2%” WR category. There’s no point in spending just to spend. Enjoy what matters to you.
It just leave less time for the two of you to enjoy life.
Re: Bogleheads at/Aiming For 2% SWR
What would be interesting is to know how many people end up at <= 2% not because that was a target. One often sees posts about windfalls (sold company, inheritance, stock options ...). In my opinion, planning around a windfall would not be wise. I had a significant windfall from NQ stock options but I never included them in my portfolio until they were converted to cash. At one point they were seriously under water.MikeG62 wrote: ↑Mon May 23, 2022 7:50 am I think there is a fair probability that if 3.0% does not work (one runs out of money before expiring), 2.0% may not work either. Said another way, 2.0% might give a false sense of security, while at the same time causing one to work many years longer than is actually necessary and/or spending a lot less than they otherwise would during retirement.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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Re: Bogleheads at/Aiming For 2% SWR
Why do so many BH assume you can't both work and enjoy life? While I am bad at retirement my wife would be 10 times worse. She is far happier working and doing the things she enjoys when the opportunity presents, as opposed to sitting around between opportunities to do the things she enjoys.smitcat wrote: ↑Mon May 23, 2022 7:53 am"I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working."TomatoTomahto wrote: ↑Mon May 23, 2022 7:42 am In a (failed) attempt to convince my dear wife to retire, I bought MaxiFi Planner years ago. The software tells me that we can spend a middle 6 digit amount annually on discretionary expenses, and that’s if I live way longer than I’m likely to (family history says she might live forever).
I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working. As a woman in tech, on the negative side, she has vindications to score against the rampant misogyny. On the positive side, she continues to enjoy making lives better by her advocacy, her mentoring, her strategic insight. The money is truly just a way to keep score and validate that she isn’t still being taken advantage of.
Do we have any desire to spend a middle six digit amount annually? I don’t think so. Even if travel opens up safely in the future, there are only so many trips we want to take. Feeding the birds, planting trees and meadows, giving our rescue dogs their “best lives,” supporting local tradespeople are, relatively speaking, minor expenses. Our house’s energy needs are free.
SS and pensions will provide $95k annually. RMDs will kick in shortly, beginning with my relatively small ones. Our taxable portfolio pays out low amounts of dividends, relatively speaking, but still it’s money that has to be re-invested.
Our heirs have made good use of their “advance inheritances.” They will be getting a large “final inheritance,” which makes us smile.
TL;DR. We easily fall in the “under 2%” WR category. There’s no point in spending just to spend. Enjoy what matters to you.
It just leave less time for the two of you to enjoy life.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. |
Run, You Clever Boy! [9085]
Re: Bogleheads at/Aiming For 2% SWR
As someone who will be retiring very soon in my late 50s, I have found that a fixed withdraw rate does not really apply all that well to my situation. In my case, there’s my withdraw rate before social security and my withdraw rate after social security. I will have a 4% or so withdraw rate for a few years, and then that will drop to under 2% once social security kicks in. The current plan is to draw around 4% for about 6 years, spouse will claim at 62 which drops us to 3% and then I claim at 70 five years later which drops us to under 1%. But if markets are really bad, there are other claiming options that would get us to < 2% sooner.
I would expect that my situation is fairly common among what I would call “late” early retirees (late 50s / early 60s).
I would expect that my situation is fairly common among what I would call “late” early retirees (late 50s / early 60s).
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Re: Bogleheads at/Aiming For 2% SWR
We never targeted where we are, it just sort of happened. Took an early retirement offer (paid to leave), got a new job with much better compensation, people say I had OMY syndrome and as we got older we no longer had any debt to service so we saved a lot more. Then there was that Bull market thing and now we look likely to delay SS until 70. Where we are today is definitely not where we originally targeted.jebmke wrote: ↑Mon May 23, 2022 7:57 amWhat would be interesting is to know how many people end up at <= 2% not because that was a target. One often sees posts about windfalls (sold company, inheritance, stock options ...). In my opinion, planning around a windfall would not be wise. I had a significant windfall from NQ stock options but I never included them in my portfolio until they were converted to cash. At one point they were seriously under water.MikeG62 wrote: ↑Mon May 23, 2022 7:50 am I think there is a fair probability that if 3.0% does not work (one runs out of money before expiring), 2.0% may not work either. Said another way, 2.0% might give a false sense of security, while at the same time causing one to work many years longer than is actually necessary and/or spending a lot less than they otherwise would during retirement.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. |
Run, You Clever Boy! [9085]
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Re: Bogleheads at/Aiming For 2% SWR
The 87% drawdown during the great depression staring in 1929 would still have survived a 30 year retirement using the 4% rule.
Check out FI Calc. Final portfolio value would have been 70% of starting after 30 years. Not too bad. 64-69 would have run out of money.
A 2% draw rate (adjusted up for inflation) starting in 1929 would have had an ending balance of 2.5x beginning. 100% success rate based on prior returns.
I plan on using 2% draw rate but its for fun stuff (travel, giving and other goodies) I'll be using my pension for the necessities. Don't forget you always have the option to tighten the belt down if market returns aren't great. Most people spend much less as they age (go go, slow no, and no go years). LTC expenses can be very high but generally last for 2-3 years on average.
Check out FI Calc. Final portfolio value would have been 70% of starting after 30 years. Not too bad. 64-69 would have run out of money.
A 2% draw rate (adjusted up for inflation) starting in 1929 would have had an ending balance of 2.5x beginning. 100% success rate based on prior returns.
I plan on using 2% draw rate but its for fun stuff (travel, giving and other goodies) I'll be using my pension for the necessities. Don't forget you always have the option to tighten the belt down if market returns aren't great. Most people spend much less as they age (go go, slow no, and no go years). LTC expenses can be very high but generally last for 2-3 years on average.
Stay the course!
Re: Bogleheads at/Aiming For 2% SWR
The thread is also about people just getting there. I wasn't aiming at 2% myself but am there due to inheritance and other circumstances. I could spend more but honestly don't feel the urge. Having a big cushion IS nice when markets are falling as they currently are. But I think putting off retirement to target 2%, unless one loves ones job, is not a great choice.
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Re: Bogleheads at/Aiming For 2% SWR
Most are underspending. BLS statistics make it clear that people tend to spend much less as they age (go-go, slow go and no go).
I've seen my family members go through these stages (my parents are in the go go to slow go transition now). Travel while you can!
As long as you have some strong buffer assets (cash, annuities, pensions) then you can spend more in the first stages (5-6% draw) and then taper it down as you age. Delaying SS is another way you can spend more up front from the portfolio to increase the SS payments later. I'm a big fan of dynamic draw strategies which taper down your draws when the market returns are bad. When you are given fantastic returns (19-21) then harvest some gains and enjoy yourself, give and do things you want to do! Life is short - enjoy the ride.
Stay the course!
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Re: Bogleheads at/Aiming For 2% SWR
I'm at 50 times predicted (with a spread sheet, constantly updated) retirement spending.
I am very much a "safety net" guy. When in grad school, there were 3 ways to graduate. I worked on all 3 with thesis work, extra courses and took the graduate exam (PhD entrance exam).
I will admit that I did not strive for this for most of my life. I had no clue. As a matter of fact, in my early 50's, I had no idea what investments we had nor where they were. It took me a year to figure all that out and by that point, I had a million and a half and joined Bogleheads. I have to say that saving for 2% really isn't all that hard. I'm an engineer and DW's a nurse. She took off 14 years to take care of the kids. I had a pretty serious track car habit that had me working on my own cars, buying trailers and tow vehicles and traveling around the northeast. We've gone to many islands in the Caribbean and Hawaii and various states. We've owned BMWs and Audis and I've had toy cars including a factory five Shelby Cobra I built and a Lotus Elise. So no, we never restricted living or doing things. I also went through a guitar obsession, learning how to be a luthier and building guitars from craigslist buys, holding a couple dozen guitars at a time and playing live in a band. I had a reserve of $1M saved to pay for my 2 kids' education which turned out to only cost bit over $300k in the end. We did have each kid in a private school for some number of years for various reasons including learning disabilities. So thinking of struggling to get to 4% is something I really don't get. Perhaps its in how each of us is put together. I'm also not a MrMoneyMustache "retire at 38 and travel the world" guy as I'm already medicare age. Both DW and I still work full time. Our house has been paid off since 2002 and we've never inherited anything.
I am very much a "safety net" guy. When in grad school, there were 3 ways to graduate. I worked on all 3 with thesis work, extra courses and took the graduate exam (PhD entrance exam).
I will admit that I did not strive for this for most of my life. I had no clue. As a matter of fact, in my early 50's, I had no idea what investments we had nor where they were. It took me a year to figure all that out and by that point, I had a million and a half and joined Bogleheads. I have to say that saving for 2% really isn't all that hard. I'm an engineer and DW's a nurse. She took off 14 years to take care of the kids. I had a pretty serious track car habit that had me working on my own cars, buying trailers and tow vehicles and traveling around the northeast. We've gone to many islands in the Caribbean and Hawaii and various states. We've owned BMWs and Audis and I've had toy cars including a factory five Shelby Cobra I built and a Lotus Elise. So no, we never restricted living or doing things. I also went through a guitar obsession, learning how to be a luthier and building guitars from craigslist buys, holding a couple dozen guitars at a time and playing live in a band. I had a reserve of $1M saved to pay for my 2 kids' education which turned out to only cost bit over $300k in the end. We did have each kid in a private school for some number of years for various reasons including learning disabilities. So thinking of struggling to get to 4% is something I really don't get. Perhaps its in how each of us is put together. I'm also not a MrMoneyMustache "retire at 38 and travel the world" guy as I'm already medicare age. Both DW and I still work full time. Our house has been paid off since 2002 and we've never inherited anything.
Bogle: Smart Beta is stupid
Re: Bogleheads at/Aiming For 2% SWR
"Why do so many BH assume you can't both work and enjoy life?"TheTimeLord wrote: ↑Mon May 23, 2022 8:02 amWhy do so many BH assume you can't both work and enjoy life? While I am bad at retirement my wife would be 10 times worse. She is far happier working and doing the things she enjoys when the opportunity presents, as opposed to sitting around between opportunities to do the things she enjoys.smitcat wrote: ↑Mon May 23, 2022 7:53 am"I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working."TomatoTomahto wrote: ↑Mon May 23, 2022 7:42 am In a (failed) attempt to convince my dear wife to retire, I bought MaxiFi Planner years ago. The software tells me that we can spend a middle 6 digit amount annually on discretionary expenses, and that’s if I live way longer than I’m likely to (family history says she might live forever).
I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working. As a woman in tech, on the negative side, she has vindications to score against the rampant misogyny. On the positive side, she continues to enjoy making lives better by her advocacy, her mentoring, her strategic insight. The money is truly just a way to keep score and validate that she isn’t still being taken advantage of.
Do we have any desire to spend a middle six digit amount annually? I don’t think so. Even if travel opens up safely in the future, there are only so many trips we want to take. Feeding the birds, planting trees and meadows, giving our rescue dogs their “best lives,” supporting local tradespeople are, relatively speaking, minor expenses. Our house’s energy needs are free.
SS and pensions will provide $95k annually. RMDs will kick in shortly, beginning with my relatively small ones. Our taxable portfolio pays out low amounts of dividends, relatively speaking, but still it’s money that has to be re-invested.
Our heirs have made good use of their “advance inheritances.” They will be getting a large “final inheritance,” which makes us smile.
TL;DR. We easily fall in the “under 2%” WR category. There’s no point in spending just to spend. Enjoy what matters to you.
It just leave less time for the two of you to enjoy life.
Due to the many posts that he has made .....
- TheTimeLord
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- Joined: Fri Jul 26, 2013 2:05 pm
Re: Bogleheads at/Aiming For 2% SWR
That makes sense. I assume it is highly individual based on one's feeling about their job.smitcat wrote: ↑Mon May 23, 2022 8:25 am"Why do so many BH assume you can't both work and enjoy life?"TheTimeLord wrote: ↑Mon May 23, 2022 8:02 amWhy do so many BH assume you can't both work and enjoy life? While I am bad at retirement my wife would be 10 times worse. She is far happier working and doing the things she enjoys when the opportunity presents, as opposed to sitting around between opportunities to do the things she enjoys.smitcat wrote: ↑Mon May 23, 2022 7:53 am"I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working."TomatoTomahto wrote: ↑Mon May 23, 2022 7:42 am In a (failed) attempt to convince my dear wife to retire, I bought MaxiFi Planner years ago. The software tells me that we can spend a middle 6 digit amount annually on discretionary expenses, and that’s if I live way longer than I’m likely to (family history says she might live forever).
I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working. As a woman in tech, on the negative side, she has vindications to score against the rampant misogyny. On the positive side, she continues to enjoy making lives better by her advocacy, her mentoring, her strategic insight. The money is truly just a way to keep score and validate that she isn’t still being taken advantage of.
Do we have any desire to spend a middle six digit amount annually? I don’t think so. Even if travel opens up safely in the future, there are only so many trips we want to take. Feeding the birds, planting trees and meadows, giving our rescue dogs their “best lives,” supporting local tradespeople are, relatively speaking, minor expenses. Our house’s energy needs are free.
SS and pensions will provide $95k annually. RMDs will kick in shortly, beginning with my relatively small ones. Our taxable portfolio pays out low amounts of dividends, relatively speaking, but still it’s money that has to be re-invested.
Our heirs have made good use of their “advance inheritances.” They will be getting a large “final inheritance,” which makes us smile.
TL;DR. We easily fall in the “under 2%” WR category. There’s no point in spending just to spend. Enjoy what matters to you.
It just leave less time for the two of you to enjoy life.
Due to the many posts that he has made .....
IMHO, Investing should be about living the life you want, not avoiding the life you fear. |
Run, You Clever Boy! [9085]
Re: Bogleheads at/Aiming For 2% SWR
I believe it has much more to do with how one feels about their life in total.TheTimeLord wrote: ↑Mon May 23, 2022 8:27 amThat makes sense. I assume it is highly individual based on one's feeling about their job.smitcat wrote: ↑Mon May 23, 2022 8:25 am"Why do so many BH assume you can't both work and enjoy life?"TheTimeLord wrote: ↑Mon May 23, 2022 8:02 amWhy do so many BH assume you can't both work and enjoy life? While I am bad at retirement my wife would be 10 times worse. She is far happier working and doing the things she enjoys when the opportunity presents, as opposed to sitting around between opportunities to do the things she enjoys.smitcat wrote: ↑Mon May 23, 2022 7:53 am"I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working."TomatoTomahto wrote: ↑Mon May 23, 2022 7:42 am In a (failed) attempt to convince my dear wife to retire, I bought MaxiFi Planner years ago. The software tells me that we can spend a middle 6 digit amount annually on discretionary expenses, and that’s if I live way longer than I’m likely to (family history says she might live forever).
I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working. As a woman in tech, on the negative side, she has vindications to score against the rampant misogyny. On the positive side, she continues to enjoy making lives better by her advocacy, her mentoring, her strategic insight. The money is truly just a way to keep score and validate that she isn’t still being taken advantage of.
Do we have any desire to spend a middle six digit amount annually? I don’t think so. Even if travel opens up safely in the future, there are only so many trips we want to take. Feeding the birds, planting trees and meadows, giving our rescue dogs their “best lives,” supporting local tradespeople are, relatively speaking, minor expenses. Our house’s energy needs are free.
SS and pensions will provide $95k annually. RMDs will kick in shortly, beginning with my relatively small ones. Our taxable portfolio pays out low amounts of dividends, relatively speaking, but still it’s money that has to be re-invested.
Our heirs have made good use of their “advance inheritances.” They will be getting a large “final inheritance,” which makes us smile.
TL;DR. We easily fall in the “under 2%” WR category. There’s no point in spending just to spend. Enjoy what matters to you.
It just leave less time for the two of you to enjoy life.
Due to the many posts that he has made .....
-
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Re: Bogleheads at/Aiming For 2% SWR
We are aiming for 2% due to a late 40's retirement age. We are very frugal and have a paid off mortgage, so it is not an obscene number to hit.
As things stand now, the bonus of not spending much is to keep a depressed taxable withdrawal before Medicare for dirt cheap ACA coverage.
As things stand now, the bonus of not spending much is to keep a depressed taxable withdrawal before Medicare for dirt cheap ACA coverage.
- TheTimeLord
- Posts: 12130
- Joined: Fri Jul 26, 2013 2:05 pm
Re: Bogleheads at/Aiming For 2% SWR
Specifically in my case, there wasn't much I wanted to do that I was delaying until retirement which I think makes a big difference. I find retirement much more frustrating since many of the people I want to do things with are still working. Before we made it work with everyone's schedule, today I am probably wanting to do some things that just won't fit in their schedules.smitcat wrote: ↑Mon May 23, 2022 8:28 amI believe it has much more to do with how one feels about their life in total.TheTimeLord wrote: ↑Mon May 23, 2022 8:27 amThat makes sense. I assume it is highly individual based on one's feeling about their job.smitcat wrote: ↑Mon May 23, 2022 8:25 am"Why do so many BH assume you can't both work and enjoy life?"TheTimeLord wrote: ↑Mon May 23, 2022 8:02 amWhy do so many BH assume you can't both work and enjoy life? While I am bad at retirement my wife would be 10 times worse. She is far happier working and doing the things she enjoys when the opportunity presents, as opposed to sitting around between opportunities to do the things she enjoys.
Due to the many posts that he has made .....
IMHO, Investing should be about living the life you want, not avoiding the life you fear. |
Run, You Clever Boy! [9085]
-
- Posts: 16054
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Re: Bogleheads at/Aiming For 2% SWR
The poll is asking about "comfy." This is not the same as achieving or aspiring to a 2% WR.Leesbro63 wrote: ↑Mon May 23, 2022 6:16 am I don’t think I’ve ever seen a thread specifically focused on Bogleheads who have achieved or aspire to a 2% (or even lower) withdrawal rate/savings at 50x annual spending. Although this poll is from another forum, it suggests that we may be a larger subset than known:
https://www.early-retirement.org/forums ... 14017.html
Is 2% folly? Belt AND suspenders? Would it be a personal tragedy to save that much and a 1929 arrives and all that accumulation goes to money heaven? Of if, as many think, we’re headed for a 1966-1981 era of inflated/declining real asset values, might 50x/2% be the solution for millions of Boomers retiring into it?
Another thing to consider is - this is SWR we're talking about, which makes no adjustments during a downturn. I do not feel comfy at 4% for this very reason. 4% constant-percentage would be a different story though.
Re: Bogleheads at/Aiming For 2% SWR
When Bill Bengen conducted the study that resulted in the 4% safe withdrawal rate, it DID occur to him to use the worst stock market crash of all time.
4% safe maximum withdrawal rate was the number he came up with. It would have survived 1929.
What you're actually saying is that you anticipate conditions to be at least twice as bad as the 1929 crash.
Keep in mind that Bengen also intended 4% to be a guideline, and for financial advisors to be flexible and adjust the withdrawal rate based on current conditions. If you haven't read his original study, it's well worth the time. It's pretty short. (source: http://www.retailinvestor.org/pdf/Bengen1.pdf)
Re: Bogleheads at/Aiming For 2% SWR
I don’t get when people consider RMDs as “income”. It’s really just a tax event that should be optimized for tax purposes.TomatoTomahto wrote: ↑Mon May 23, 2022 7:42 am In a (failed) attempt to convince my dear wife to retire, I bought MaxiFi Planner years ago. The software tells me that we can spend a middle 6 digit amount annually on discretionary expenses, and that’s if I live way longer than I’m likely to (family history says she might live forever).
I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working. As a woman in tech, on the negative side, she has vindications to score against the rampant misogyny. On the positive side, she continues to enjoy making lives better by her advocacy, her mentoring, her strategic insight. The money is truly just a way to keep score and validate that she isn’t still being taken advantage of.
Do we have any desire to spend a middle six digit amount annually? I don’t think so. Even if travel opens up safely in the future, there are only so many trips we want to take. Feeding the birds, planting trees and meadows, giving our rescue dogs their “best lives,” supporting local tradespeople are, relatively speaking, minor expenses. Our house’s energy needs are free.
SS and pensions will provide $95k annually. RMDs will kick in shortly, beginning with my relatively small ones. Our taxable portfolio pays out low amounts of dividends, relatively speaking, but still it’s money that has to be re-invested.
Our heirs have made good use of their “advance inheritances.” They will be getting a large “final inheritance,” which makes us smile.
TL;DR. We easily fall in the “under 2%” WR category. There’s no point in spending just to spend. Enjoy what matters to you.
- TomatoTomahto
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- Joined: Mon Apr 11, 2011 1:48 pm
Re: Bogleheads at/Aiming For 2% SWR
True enough. But it’s money that will have to be dealt with. It can go to pay taxes, be re-invested in taxable, spent, or most likely, a combination of all three.Leesbro63 wrote: ↑Mon May 23, 2022 8:48 amI don’t get when people consider RMDs as “income”. It’s really just a tax event that should be optimized for tax purposes.TomatoTomahto wrote: ↑Mon May 23, 2022 7:42 am In a (failed) attempt to convince my dear wife to retire, I bought MaxiFi Planner years ago. The software tells me that we can spend a middle 6 digit amount annually on discretionary expenses, and that’s if I live way longer than I’m likely to (family history says she might live forever).
I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working. As a woman in tech, on the negative side, she has vindications to score against the rampant misogyny. On the positive side, she continues to enjoy making lives better by her advocacy, her mentoring, her strategic insight. The money is truly just a way to keep score and validate that she isn’t still being taken advantage of.
Do we have any desire to spend a middle six digit amount annually? I don’t think so. Even if travel opens up safely in the future, there are only so many trips we want to take. Feeding the birds, planting trees and meadows, giving our rescue dogs their “best lives,” supporting local tradespeople are, relatively speaking, minor expenses. Our house’s energy needs are free.
SS and pensions will provide $95k annually. RMDs will kick in shortly, beginning with my relatively small ones. Our taxable portfolio pays out low amounts of dividends, relatively speaking, but still it’s money that has to be re-invested.
Our heirs have made good use of their “advance inheritances.” They will be getting a large “final inheritance,” which makes us smile.
TL;DR. We easily fall in the “under 2%” WR category. There’s no point in spending just to spend. Enjoy what matters to you.
I get the FI part but not the RE part of FIRE.
Re: Bogleheads at/Aiming For 2% SWR
It's not really our initial financial goal. Our portfolio just continues to grow organically and crossed the 50x 2 years ago. Being a dual income family, it's easier for us to save and build wealth. We live on about roughly a quarter of one income and save the rest. We are not planning to retire or stop working anytime soon. Maybe we change our mind later. Who knows? At least we have plenty of options.Leesbro63 wrote: ↑Mon May 23, 2022 6:16 am I don’t think I’ve ever seen a thread specifically focused on Bogleheads who have achieved or aspire to a 2% (or even lower) withdrawal rate/savings at 50x annual spending. Although this poll is from another forum, it suggests that we may be a larger subset than known:
https://www.early-retirement.org/forums ... 14017.html
Is 2% folly? Belt AND suspenders? Would it be a personal tragedy to save that much and a 1929 arrives and all that accumulation goes to money heaven? Of if, as many think, we’re headed for a 1966-1981 era of inflated/declining real asset values, might 50x/2% be the solution for millions of Boomers retiring into it?
Time is the ultimate currency.
Re: Bogleheads at/Aiming For 2% SWR
But it’s only cash flow because you have to make sure that it’s cash low. It’s not income at all (except for Form 1040).TomatoTomahto wrote: ↑Mon May 23, 2022 9:17 amTrue enough. But it’s money that will have to be dealt with. It can go to pay taxes, be re-invested in taxable, spent, or most likely, a combination of all three.Leesbro63 wrote: ↑Mon May 23, 2022 8:48 amI don’t get when people consider RMDs as “income”. It’s really just a tax event that should be optimized for tax purposes.TomatoTomahto wrote: ↑Mon May 23, 2022 7:42 am In a (failed) attempt to convince my dear wife to retire, I bought MaxiFi Planner years ago. The software tells me that we can spend a middle 6 digit amount annually on discretionary expenses, and that’s if I live way longer than I’m likely to (family history says she might live forever).
I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working. As a woman in tech, on the negative side, she has vindications to score against the rampant misogyny. On the positive side, she continues to enjoy making lives better by her advocacy, her mentoring, her strategic insight. The money is truly just a way to keep score and validate that she isn’t still being taken advantage of.
Do we have any desire to spend a middle six digit amount annually? I don’t think so. Even if travel opens up safely in the future, there are only so many trips we want to take. Feeding the birds, planting trees and meadows, giving our rescue dogs their “best lives,” supporting local tradespeople are, relatively speaking, minor expenses. Our house’s energy needs are free.
SS and pensions will provide $95k annually. RMDs will kick in shortly, beginning with my relatively small ones. Our taxable portfolio pays out low amounts of dividends, relatively speaking, but still it’s money that has to be re-invested.
Our heirs have made good use of their “advance inheritances.” They will be getting a large “final inheritance,” which makes us smile.
TL;DR. We easily fall in the “under 2%” WR category. There’s no point in spending just to spend. Enjoy what matters to you.
Re: Bogleheads at/Aiming For 2% SWR
I treat it conceptually as spending. A portion will go out as taxes (an expense) unless, increasingly likely in our case, 100% goes to charity (also an expense).
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
Re: Bogleheads at/Aiming For 2% SWR
Before retirement we did all kinds of things that many delay until they are retired. Now that we are 'retired' we do many things as before and a few that are 'new'. At no point in life that I can remember have we waited for anyone else.... whether that was work, family, activities, projects, etc.TheTimeLord wrote: ↑Mon May 23, 2022 8:34 amSpecifically in my case, there wasn't much I wanted to do that I was delaying until retirement which I think makes a big difference. I find retirement much more frustrating since many of the people I want to do things with are still working. Before we made it work with everyone's schedule, today I am probably wanting to do some things that just won't fit in their schedules.smitcat wrote: ↑Mon May 23, 2022 8:28 amI believe it has much more to do with how one feels about their life in total.TheTimeLord wrote: ↑Mon May 23, 2022 8:27 amThat makes sense. I assume it is highly individual based on one's feeling about their job.smitcat wrote: ↑Mon May 23, 2022 8:25 am"Why do so many BH assume you can't both work and enjoy life?"TheTimeLord wrote: ↑Mon May 23, 2022 8:02 am
Why do so many BH assume you can't both work and enjoy life? While I am bad at retirement my wife would be 10 times worse. She is far happier working and doing the things she enjoys when the opportunity presents, as opposed to sitting around between opportunities to do the things she enjoys.
Due to the many posts that he has made .....
- TheTimeLord
- Posts: 12130
- Joined: Fri Jul 26, 2013 2:05 pm
Re: Bogleheads at/Aiming For 2% SWR
For me there are activities/hobbies of mine that my wife does not share and would be most enjoyable shared with friends. There are ways I would prefer to do family vacations and gatherings that won't work for others. Maybe I am unique, but in my life there are events that really can't happen without other participating.smitcat wrote: ↑Mon May 23, 2022 9:41 amBefore retirement we did all kinds of things that many delay until they are retired. Now that we are 'retired' we do many things as before and a few that are 'new'. At no point in life that I can remember have we waited for anyone else.... whether that was work, family, activities, projects, etc.TheTimeLord wrote: ↑Mon May 23, 2022 8:34 amSpecifically in my case, there wasn't much I wanted to do that I was delaying until retirement which I think makes a big difference. I find retirement much more frustrating since many of the people I want to do things with are still working. Before we made it work with everyone's schedule, today I am probably wanting to do some things that just won't fit in their schedules.smitcat wrote: ↑Mon May 23, 2022 8:28 amI believe it has much more to do with how one feels about their life in total.TheTimeLord wrote: ↑Mon May 23, 2022 8:27 amThat makes sense. I assume it is highly individual based on one's feeling about their job.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. |
Run, You Clever Boy! [9085]
Re: Bogleheads at/Aiming For 2% SWR
But less than half becomes taxes. For many/most “affluent but not filthy rich” maybe only 1/3 ends up “spent” as taxes. RMDs are, by and large, just a tax event having very little to do with income or spending.
Re: Bogleheads at/Aiming For 2% SWR
I have no idea what your situation is - but I have always observed that there are always many more reasons 'not to do something' than there are 'to do something'.TheTimeLord wrote: ↑Mon May 23, 2022 9:53 amFor me there are activities/hobbies of mine that my wife does not share and would be most enjoyable shared with friends. There are ways I would prefer to do family vacations and gatherings that won't work for others. Maybe I am unique, but in my life there are events that really can't happen without other participating.smitcat wrote: ↑Mon May 23, 2022 9:41 amBefore retirement we did all kinds of things that many delay until they are retired. Now that we are 'retired' we do many things as before and a few that are 'new'. At no point in life that I can remember have we waited for anyone else.... whether that was work, family, activities, projects, etc.TheTimeLord wrote: ↑Mon May 23, 2022 8:34 amSpecifically in my case, there wasn't much I wanted to do that I was delaying until retirement which I think makes a big difference. I find retirement much more frustrating since many of the people I want to do things with are still working. Before we made it work with everyone's schedule, today I am probably wanting to do some things that just won't fit in their schedules.smitcat wrote: ↑Mon May 23, 2022 8:28 amI believe it has much more to do with how one feels about their life in total.TheTimeLord wrote: ↑Mon May 23, 2022 8:27 am
That makes sense. I assume it is highly individual based on one's feeling about their job.
So many things possible in life and so little time to do them.
Re: Bogleheads at/Aiming For 2% SWR
Yes - I think that is pretty accurate.Leesbro63 wrote: ↑Mon May 23, 2022 9:53 amBut less than half becomes taxes. For many/most “affluent but not filthy rich” maybe only 1/3 ends up “spent” as taxes. RMDs are, by and large, just a tax event having very little to do with income or spending.
- TheTimeLord
- Posts: 12130
- Joined: Fri Jul 26, 2013 2:05 pm
Re: Bogleheads at/Aiming For 2% SWR
I mean this in only the most positive way, to some extent do you see it or find it to be like a game you are attempting to master?TomatoTomahto wrote: ↑Mon May 23, 2022 9:17 amTrue enough. But it’s money that will have to be dealt with. It can go to pay taxes, be re-invested in taxable, spent, or most likely, a combination of all three.Leesbro63 wrote: ↑Mon May 23, 2022 8:48 amI don’t get when people consider RMDs as “income”. It’s really just a tax event that should be optimized for tax purposes.TomatoTomahto wrote: ↑Mon May 23, 2022 7:42 am In a (failed) attempt to convince my dear wife to retire, I bought MaxiFi Planner years ago. The software tells me that we can spend a middle 6 digit amount annually on discretionary expenses, and that’s if I live way longer than I’m likely to (family history says she might live forever).
I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working. As a woman in tech, on the negative side, she has vindications to score against the rampant misogyny. On the positive side, she continues to enjoy making lives better by her advocacy, her mentoring, her strategic insight. The money is truly just a way to keep score and validate that she isn’t still being taken advantage of.
Do we have any desire to spend a middle six digit amount annually? I don’t think so. Even if travel opens up safely in the future, there are only so many trips we want to take. Feeding the birds, planting trees and meadows, giving our rescue dogs their “best lives,” supporting local tradespeople are, relatively speaking, minor expenses. Our house’s energy needs are free.
SS and pensions will provide $95k annually. RMDs will kick in shortly, beginning with my relatively small ones. Our taxable portfolio pays out low amounts of dividends, relatively speaking, but still it’s money that has to be re-invested.
Our heirs have made good use of their “advance inheritances.” They will be getting a large “final inheritance,” which makes us smile.
TL;DR. We easily fall in the “under 2%” WR category. There’s no point in spending just to spend. Enjoy what matters to you.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. |
Run, You Clever Boy! [9085]
- jeffyscott
- Posts: 13487
- Joined: Tue Feb 27, 2007 8:12 am
Re: Bogleheads at/Aiming For 2% SWR
Aiming for 3% and hitting 2% is possible, as well.MikeG62 wrote: ↑Mon May 23, 2022 7:50 am I think there is a fair probability that if 3.0% does not work (one runs out of money before expiring), 2.0% may not work either. Said another way, 2.0% might give a false sense of security, while at the same time causing one to work many years longer than is actually necessary and/or spending a lot less than they otherwise would during retirement.
At the end of 2021, Vanguard moderate growth was up about 62.5% cumulative over the prior 5 year period. Inflation was about 15% over that time, so that was almost enough to change 3% to 2%, inflation adjusted.
- TomatoTomahto
- Posts: 17158
- Joined: Mon Apr 11, 2011 1:48 pm
Re: Bogleheads at/Aiming For 2% SWR
Maybe I shouldn’t admit this on BH, but if I’m telling the truth, i don’t think of it as a game to master but rather as something I’m supposed to be doing. Tbh, it’s boring and something I’m very happy to leave to an attorney and, ultimately, our heirs to think about.TheTimeLord wrote: ↑Mon May 23, 2022 9:58 amI mean this in only the most positive way, to some extent do you see it or find it to be like a game you are attempting to master?TomatoTomahto wrote: ↑Mon May 23, 2022 9:17 amTrue enough. But it’s money that will have to be dealt with. It can go to pay taxes, be re-invested in taxable, spent, or most likely, a combination of all three.Leesbro63 wrote: ↑Mon May 23, 2022 8:48 amI don’t get when people consider RMDs as “income”. It’s really just a tax event that should be optimized for tax purposes.TomatoTomahto wrote: ↑Mon May 23, 2022 7:42 am In a (failed) attempt to convince my dear wife to retire, I bought MaxiFi Planner years ago. The software tells me that we can spend a middle 6 digit amount annually on discretionary expenses, and that’s if I live way longer than I’m likely to (family history says she might live forever).
I (finally ) realized that my wife’s wanting to be financially able to provide a safety net for children, siblings, parents was BS; she just loves working. As a woman in tech, on the negative side, she has vindications to score against the rampant misogyny. On the positive side, she continues to enjoy making lives better by her advocacy, her mentoring, her strategic insight. The money is truly just a way to keep score and validate that she isn’t still being taken advantage of.
Do we have any desire to spend a middle six digit amount annually? I don’t think so. Even if travel opens up safely in the future, there are only so many trips we want to take. Feeding the birds, planting trees and meadows, giving our rescue dogs their “best lives,” supporting local tradespeople are, relatively speaking, minor expenses. Our house’s energy needs are free.
SS and pensions will provide $95k annually. RMDs will kick in shortly, beginning with my relatively small ones. Our taxable portfolio pays out low amounts of dividends, relatively speaking, but still it’s money that has to be re-invested.
Our heirs have made good use of their “advance inheritances.” They will be getting a large “final inheritance,” which makes us smile.
TL;DR. We easily fall in the “under 2%” WR category. There’s no point in spending just to spend. Enjoy what matters to you.
Even as recently as 2 years ago, I worried that we had saved too much in tax deferred and oncoming tax torpedos and Roth conversions and blah blah blah. We have worked hard to get here, and I think the reward should be that I’m allowed to just shrug and say the senior equivalent of a teenager’s Whatever.
I get the FI part but not the RE part of FIRE.
Re: Bogleheads at/Aiming For 2% SWR
duplicate
Last edited by Zeno on Mon May 23, 2022 10:43 am, edited 2 times in total.