Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
You were taking $160k whether you were working or not. You say you can take $60k more. Just doing basic math you can see that it takes $5.5 million to throw off $220k at 4%. I probably did math like that at some point in the past that had me have in mind the amount you were likely working with. I still think it is $7 million (likely from other info you posted).
4% applies to 30 year retirements not 22 year …
actually throwing in a 160k a year draw for 22 years only needs 3.5 million at 50/50 to have a 96% success rate
FIRECalc Results
Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.
FIRECalc looked at the 131 possible 22 year periods in the available data, starting with a portfolio of $3,500,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 131 cycles. The lowest and highest portfolio balance at the end of your retirement was $-260,919 to $10,835,805, with an average at the end of $3,292,099. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 22 years. FIRECalc found that 4 cycles failed, for a success rate of 96.9%.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,080 posts, read 7,527,706 times
Reputation: 9814
Quote:
Originally Posted by mathjak107
4% applies to 30 year retirements not 22 year …
actually throwing in a 160k a year draw for 22 years only needs 3.5 million at 50/50 to have a 96% success rate
[...snip...]
FIRECalc Results....
For our purposes, failure means the portfolio was depleted before the end of the 22 years. FIRECalc found that 4 cycles failed, for a success rate of 96.9%.
It's not the 4% failure rate that scares me, it's the thought that when you're down to your last 3 years of living costs you may begin to realize that the 4% failure is personalized to a much shorter withdrawal period such as a 5 year near to end-of-life. Consequently, a person/couple will rapidly adjust their spending to avoid the complete loss of their carefully planned nest egg. We, Boomers should know that a 1-4year sharp reduction in the economy is very possible at the moment when you need that cash flow.
It's not the 4% failure rate that scares me, it's the thought that when you're down to your last 3 years of living costs you may begin to realize that the 4% failure is personalized to a much shorter withdrawal period such as a 5 year near to end-of-life. Consequently, a person/couple will rapidly adjust their spending to avoid the complete loss of their carefully planned nest egg. We, Boomers should know that a 1-4year sharp reduction in the economy is very possible at the moment when you need that cash flow.
absolutely…. the 4% swr assumes you may have a buck left at the end of the time frame you planned for under worst case out comes .
the good news is that in practice when combined with life expectancy a 90% success rate is actually about 98% as most of us will not live 30 years in retirement
I think your numbers from your spreadsheet are a good start, but that doesn't take into account the whole picture. You should have a large portfolio value that can be used for likely high cost repairs and items such as a replacement of the roof. Replacement of the air conditioning. Replacement of the heating system. Replacement of major appliances washer/dryer, kitchen stove, dishwasher, fridge. Major car repairs or purchasing a replacement vehicle. Lawn maintenance. Depending on where you live, snow removal. At some point you might need in-house cleaning services. You can't predict the timing of these events, but they could hit very close to each other.
I think your numbers from your spreadsheet are a good start, but that doesn't take into account the whole picture. You should have a large portfolio value that can be used for likely high cost repairs and items such as a replacement of the roof. Replacement of the air conditioning. Replacement of the heating system. Replacement of major appliances washer/dryer, kitchen stove, dishwasher, fridge. Major car repairs or purchasing a replacement vehicle. Lawn maintenance. Depending on where you live, snow removal. At some point you might need in-house cleaning services. You can't predict the timing of these events, but they could hit very close to each other.
On paper it looks like he has an extra $20k per year he could save from the rental. He could also earn another $20k from his side gig. He could use all that to beef up a bigger cash cushion.
Or, he can make up to about $140k with that side gig and he could just do that another couple of years before pulling the plug. Maybe to at least 65 when Medicare kicks in and creates a little less worry over those bills.
actually throwing in a 160k a year draw for 22 years only needs 3.5 million at 50/50 to have a 96% success rate
FIRECalc Results
Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.
FIRECalc looked at the 131 possible 22 year periods in the available data, starting with a portfolio of $3,500,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 131 cycles. The lowest and highest portfolio balance at the end of your retirement was $-260,919 to $10,835,805, with an average at the end of $3,292,099. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 22 years. FIRECalc found that 4 cycles failed, for a success rate of 96.9%.
What 22 years? Haven't you been retired for many years already? Anyways, I was just doing a quick and dirty calc on your ass ets. Plus, you also play the game where you have different portfolios (one for you, one for the kids, one for your alter ego (the gambler), etc.).
Last edited by Wile E. Coyote; 12-26-2023 at 12:33 AM..
What 22 years? Haven't you been retired for many years already? Anyways, I was just doing a quick and dirty calc on your ass ets. Plus, you also play the game where you have different portfolios (one for you, one for the kids, one for your alter ego (the gambler), etc.).
if we planned for a 30 year retirement 8 years ago there is 22 years left to calculate ..at 62 one typically plans for 30 years
I have friends that retired in Year 2000. She is 77 and he is turning 80. There is no end in sight. Both have heinous longevity with their parents. They have been traveling to Europe 5-6 times a year since 2005.
we typically plan for a 30 year retirement since unless you are a worst case outcome which is unlikely 8 years in , you can end with anywhere from what you’started with to 2x what you started with.
so any calculations we run now are for 22 years
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
