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...So when I need to make a major decision and just can't make up my mind I just ask myself the simple question. 'Will it kill me if I get it wrong' and if the answer is not literally yes it will, then I just make a decision and move on. It's a way to make a leap of faith. Of course that may not work for everyone but it's one way to make a decision where certainty cannot be expected.

SWR is for pussies to believe in.
I find this take very interesting, particularly when paired to your earlier comments:

I decided at 35 to retire early. I did not just pack it in and let tomorrow take care of tomorrow. I came up with a 10 year financial plan that I thought would get me to a point where I would have more than enough income to live on in the way I intended to live at least initially. As it worked out, I achieved my goal in 7 years, not 10 and when I got there I did pack it in. The point here is that even though I would have liked to retire at 35, I did not find it difficult to continue on till 43, because I knew it was not going to go on forever. The goal made the interim time span quite bearable. And the income I had when I did quit was more than enough for my needs. There is no problem figuring out what to do when you have more money than you need.
Would it have been fatal, I mean literally, to retire at 35?

Should the OP do as you say or as you did?
 

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I find this take very interesting, particularly when paired to your earlier comments:



Would it have been fatal, I mean literally, to retire at 35?

Should the OP do as you say or as you did?
No it would not have been fatal Topo but it would obviously have been STUPID since we live in a world that requires. Money. I could have quit at 35 with far less money and no doubt would have ended up having go back to work whether I wanted to or not.

The point is when you have a decision to make that seems viable either way, that is when I go to the 'will it kill me'. So at 43 when I believed I had enough to retire, I had a VIABLE choice to make THEN, quit or keep working. I could reasonably do either. That is when the fear kicks in and people often get into the 'one more year' cycle.

This fear and subsequent 'one more year' is very common with those contemplating early retirement. That's when they need a way to deal with the FEAR, the money is not the problem at that point.
 

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No it would not have been fatal Topo but it would obviously have been STUPID since we live in a world that requires. Money. I could have quit at 35 with far less money and no doubt would have ended up having go back to work whether I wanted to or not.

The point is when you have a decision to make that seems viable either way, that is when I go to the 'will it kill me'. So at 43 when I believed I had enough to retire, I had a VIABLE choice to make THEN, quit or keep working. I could reasonably do either. That is when the fear kicks in and people often get into the 'one more year' cycle.

This fear and subsequent 'one more year' is very common with those contemplating early retirement. That's when they need a way to deal with the FEAR, the money is not the problem at that point.
My understanding is that OP is not in the OMY phase yet. I would argue he is in a stage closer to your "35" than "43". So I think discussions on SWR would be appropriate in this setting in preparation for what is to come. Once he gets to stage 43, then he may need to be pushed off the OMY bandwagon to lead a life of leisure on the beaches.

Regardless, I agree with you that if OP decides to call it quits in his current status, there will be no casualties. There will be opportunities in the future to correct course, particularly for someone as young and talented as OP.
 

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The 4% rule is meant to be adjusted for inflation each year. Also, it is calculated once at the beginning of retirement. So for a 1m portfolio, you take 40k year one, and 40,800 year 2 (assuming 2% inflation), ...
Right, it's a very specific recipe. You take 4% of the initial amount. Each year, the withdrawal is increased with inflation, for 30 years. You withdraw exactly that amount from the investment portfolio; withdrawals means dividends, distributions, and liquidation.

In these studies, "success" means that withdrawals can be made for 30 years, even if the final balance is zero. If the investment portfolio is down to 3 cents in the final year, that's a successful 4% withdrawal scheme.

I think it's generally acknowledged that 4% is not a sustainable withdrawal rate when the time horizon is longer than 30 years.

There are variations on this approach which are popular among some CMF members: you can add flexibility to your withdrawals. Instead of constant withdrawals, if you go to a variable withdrawal scheme and can reduce your withdrawals (spending) in bad market years, the capital can last a lot longer.

The chart above is historical, but it seems that a withdrawal rate of 3% (or at most 3.5%) would be more appropriate for a young early retiree, using a 50/50 or 75/25 portfolio.
When I studied all this a few years ago, including doing my own Monte Carlo simulations, I arrived at the 3% withdrawal rate for a very young retirement (say for 60 years of withdrawals).

Currently in my early/partial retirement, I am withdrawing at about 2.0% and earning the rest of the money through employment.
 

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I did read @Mukhang pera 's entire post :)

I didn't realize this millennial couple had contempt for the boomers. That's unpleasant and I wish Ms. Shen wasn't doing that because I think it's unfair and inaccurate. Overall, I'm concerned that this couple is overconfident about their situation.

I wonder if the couple will change their mind about the need for housing as they get older. But humans are adaptable creatures and there are many ways this can work. If they do any kind of odd job, and get extra income, it can help make it work. My guess is that they will work again at some point.

She speaks of her friend "Agnes", who spent 14 years getting a PhD in a field, apparently with scant demand for graduates. What does that prove? That her friend was not too bright. And 14 years to accomplish?
. . .
Next we are told the sad story of "Amanda" who stupidly worked 60-80 hour a week on promise of a promotion, then got dumped at the end of the year.
Yeah, the stories don't impress me either. They seem dramatic and not very useful. My guess is that there is some pain or resentment from the couple's experience in the working world, especially with my direct experience in the husband's work environment. It was not a pleasant place to work.

In the second article linked, we are told of Ms. Shen "As a teenager, she chose to be a computer engineer, ignoring her dream to be a writer, based on a formula she devised to rank the best value university courses based on tuition fees versus future pay." So, she elected to go after money to the exclusion of all else, and ended up, as she calls it, chained to a job she hated. Good planning there. But still, the boomers' fault.
This part is pretty funny. It sounds like she actually succeeded at her own optimization.

But in the interim, tell us about how others can have an investment portfolio of $1 million by age 31. Must one follow a course of study one hates to get a job one hates but will pay $250,000 a year or so from the get? You purport to be leading the millennial financial freedom revolution. Kindly provide a step-by-step guide that any can follow. The "I did it so anyone can do it" notion rings hollow.
They both contributed, so it's more like 500K coming from each person. Definitely very doable for a computer engineer. Back in those years, we were making around 100K gross income but the companies we worked for had generous stock plans. Total compensation might have been maybe 120K to 150K and their household gross income might have been as high as 300K a year!

The main reason I don't like her generalized "advice" is that she seems to gloss over the fact they were two very well paid engineers with enormous income at a young age. How many 30 year olds today are making 150K income?

That their commentary is larded with pejorative language and dripping with disdain for the "boomers" makes one question their credibility. That they attribute to all boomers the same attitudes and advice to those coming behind is just plan wrong.
. . .
This woman talks about a modus operandi that will provide a good income stream and life for many, many years and she claims to know this to a certainty. I do not accept that. Her plan might have to undergo significant modification or it will fail. As I have said, she's only a few years out and already I see the much-vaunted nomadic lifestyle as having been dealt a crippling blow.
Those are all valid criticisms. As for her plan: if she had taken more time to read those Trinity studies (about the 4% withdrawal rate) and the follow-up work, she would have learned that this is probabilistic stuff and there are NO guarantees. If markets perform terribly, she's going to have to reevaluate her plan.
 

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My understanding is that OP is not in the OMY phase yet. I would argue he is in a stage closer to your "35" than "43". So I think discussions on SWR would be appropriate in this setting in preparation for what is to come. Once he gets to stage 43, then he may need to be pushed off the OMY bandwagon to lead a life of leisure on the beaches.

Regardless, I agree with you that if OP decides to call it quits in his current status, there will be no casualties. There will be opportunities in the future to correct course, particularly for someone as young and talented as OP.
Actually Topo, the OP has said nothing about their financial situation. They could be sitting with $1 million in the bank or $1000 in the bank, we don't know.

All we do know is the OP says he is not happy and he tells us he wants to go lay in a hammock somewhere. If you read his OP again, you will see that he says in the title he would like 'some advice' but the only questions he actually asks is, 'am I nuts?' and 'does anyone else feel this way?' Both of those questions only require a yes or no answer and do not ask for 'advice'.

So we are left to guess whether he actually wants any advice as his title suggests, on what to do about his situation or if he just wants validation that how he feels is not nuts, which is what his questions ask. Those responding like you and I, have chosen to guess that he actually wants advice rather than just validation and so we see some posting about how to retire early and some just suggesting, 'maybe you need a change of career, etc.'

It may be he only wanted validation and is perfectly happy figuring out for himself how to go about achieving his dream. That may be why he hasn't returned to comment. He may not want advice at all on how to proceed. We don't know.

Now to address your point re the 'one more year' issue. We don't know whether he is there or not. He does give us a clue in saying that, "I could probably work another 5 years and provide for my future children the same way my parents did for me." That indicates he believes he is within 5 years of being able to manage some kind of income in retirement that would be sufficient to live on reasonably AND provide for future children.

However, he has no children, so is the thought about 'future children' perhaps a form of 'one more year'? 'What if I have children' is no different really than saying, 'what if I run out of money'. One more year is all about 'what if' in any form.

Really, without the OP returning to comment and add clarity, the thread is now simply about those responding discussing various aspects of early retirement, like the SWR system. We can continue discussing early retirement WITHOUT reference to the OP but we can't continue to discuss it WITH reference to the OP unless the OP chooses to return.
 

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In regards to SWR, as I have already said, I am not a fan. It may work on paper but if you do some research you will find many examples of people who followed that path and then in the 2008 depression, saw the wheels fall of their wagon.

SWR is a model that does NOT have flexibility. When people talk about following it but being flexible in bad market years, first, either you are following SWR or you are not. If you start changing withdrawals from one year to another, you are on some other model that more than likely is no 'model' at all.

SWR requires some really big 'asks' of people who follow it. When as in 2008 someone sees their capital value drop by say 25%, asking them to 'have faith' and still withdraw the amount the SWR model tells them they can withdraw, is a huge ask. It does not allow for HUMAN behaviour. You have to act like a computer. The model says, 'don't worry, it will come up again and all will be well, you have to stick with it long term'. The number of people who can do that is pretty limited I would say. So as in 2008, you see people leaving the model behind and withdrawing less and perhaps even getting a job as a Walmart greeter to make up the difference.

Making up the 'difference' is another area where those who advocate a 'modified SWR' where you vary the amount of withdrawal, has a flaw. They don't talk about having to get a part time job when you reduce your withdrawal, they usually only talk about 'reducing' your spending. That ASSUMES you can do so. That may be the case where say, you need $x per year to live on but were working with an SWR that gave you $x plus 25% income. But what if you need $x and your SWR plan is designed to provide just that amount? You will have a shortfall that you must make up somehow and can't make it up by reducing spending.

My experience is that a very significant percentage of early retirees have a plan that has them living 'on the edge' in that regard. They figure out that they need $x income to live on and that is how much income their plan covers. It has little or no 'cushion'. If you look at what happened to many British retirees who went to live in their 'villa with a pool' in Spain, you can see what happens. In that case, it wasn't a large drop in the stock market that caught them, it was a rise in currency exchange. Look at the historical exchange rate here:

Then imagine you were someone who retired in 2000 when a Euro cost you .61 GBP. You then moved to your villa and started enjoying the good life. The exchange started creeping up on you but you were still OK, maybe you just ate out fewer times etc. Just tighten the belt a little. Then came 2008 and the exchange jumped to as high as .97 GBP to the Euro. A jump of 30% in one year! Your belt ran out of holes to tighten it.

Their are various ways a plan can go off the rails such as a drop in stock values or an increase in exchange rates if you choose to retire abroad. Whatever the reason, if you do not have a substantial cushion built into your plan, you have a problem. Most people do not have such a cushion built in for the simple reason that to do so requires either a whole lot more capital OR a means of generating a whole lot more income from a given amount of capital and SWR certainly isn't about the latter.

I suggest an income allocation based on a 'Rule of 3's'. One third of income covers living expenses, one third is for discretionary spending and one third is for savings. That gives you a 66% 'cushion' for when things go badly. But how many people who plan to follow the SWR model do you think are planning for an income that allows them to put 1/3rd of it back into savings/investments? They plan only to take money OUT, not to have enough to put money IN.

I advocate the Rule of 3s but it is not an absolute, you can vary the allocations. A popular model is the 50/20/30 Budget Rule. That suggests 50% for living costs, 20% for savings, 30% for discretionary spending.
The point is to have a substantial cushion between living costs and total income.

Consider either of those models vs. SWR. SWR has you in the mind set of 'eating capital' while the models I suggest has you in the mind set of 'increasing capital'. I have been retired now for 31 years and my net worth has increased (with a few little bumps along the way) throughout. Do you think I ever worry about 'running out of money'? I do not think you will find many retirees following the SWR model who never worry about that when they see their stock portfolio drop in value from one day to another.

The SWR model may actually work as many are convinced it does but its biggest flaw in my opinion is that it does not allow for being HUMAN. It requires you to turn of your brain and be a computer. Trust in the numbers and never let fear enter your mind.
 

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Actually Topo, the OP has said nothing about their financial situation. They could be sitting with $1 million in the bank or $1000 in the bank, we don't know.

All we do know is the OP says he is not happy and he tells us he wants to go lay in a hammock somewhere. If you read his OP again, you will see that he says in the title he would like 'some advice' but the only questions he actually asks is, 'am I nuts?' and 'does anyone else feel this way?' Both of those questions only require a yes or no answer and do not ask for 'advice'.

So we are left to guess whether he actually wants any advice as his title suggests, on what to do about his situation or if he just wants validation that how he feels is not nuts, which is what his questions ask. Those responding like you and I, have chosen to guess that he actually wants advice rather than just validation and so we see some posting about how to retire early and some just suggesting, 'maybe you need a change of career, etc.'

It may be he only wanted validation and is perfectly happy figuring out for himself how to go about achieving his dream. That may be why he hasn't returned to comment. He may not want advice at all on how to proceed. We don't know.

Now to address your point re the 'one more year' issue. We don't know whether he is there or not. He does give us a clue in saying that, "I could probably work another 5 years and provide for my future children the same way my parents did for me." That indicates he believes he is within 5 years of being able to manage some kind of income in retirement that would be sufficient to live on reasonably AND provide for future children.

However, he has no children, so is the thought about 'future children' perhaps a form of 'one more year'? 'What if I have children' is no different really than saying, 'what if I run out of money'. One more year is all about 'what if' in any form.

Really, without the OP returning to comment and add clarity, the thread is now simply about those responding discussing various aspects of early retirement, like the SWR system. We can continue discussing early retirement WITHOUT reference to the OP but we can't continue to discuss it WITH reference to one the OP unless the OP chooses to return.
The OP did provide their very basic information

I'm going through my midlife crisis. I'm 35 and married, no kids...
I make around 185k a year. I have built a nest egg of $500k, I have no debt, no house.
However, as you mentioned without OP coming back to respond what he is looking for, it's just a guess for all of us. Everyone is both on thread scope and off thread scope.

@twowheeled No one here can give you much more advice without you coming back into the conversation.
Could it be burnout or wrong career choice? Maybe
Could it be that haven't found something fulfilling in life whether its work, family, or kids? Maybe
Could it be that you just hate working, and want to retire early and really will be happy drinking beer in another country? Maybe
Could it be that you have baggage from your upbringing? Most likely
Do you have enough? Maybe, depending on what you can get your expenses down too. If I recall way back you were a young project manager that liked spending on his toys. You have to ask will retiring give you the toys you want, or where the toys a distraction?

Everyone is just making assumptions here. It comes down to you taking the time with your spouse to explore what will make you happy. I have personally found running towards something makes you happier than running away from something. You said you didn't have kids, but didn't mention if that's something you and your partner wants. That may be major decision that would impact your choices.

I think a few years ago, you had posted something similar (more about your spending) and my advice was to save some of your money when you are young and have such a high income so you have the choice to not work later. I think that is the same thing here. You make a great income, so if you hate working, then working on increasing your nest egg from $500K will give you more flexibility to FIRE. That would be my first piece of advice, is figure a way to either reduce your expenses or increase your income or both. While you are doing that, have the conversations of what you and your spouse really want. Come back with some answers.
 

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The OP did provide their very basic information



However, as you mentioned without OP coming back to respond what he is looking for, it's just a guess for all of us. Everyone is both on thread scope and off thread scope.

@twowheeled No one here can give you much more advice without you coming back into the conversation.
Could it be burnout or wrong career choice? Maybe
Could it be that haven't found something fulfilling in life whether its work, family, or kids? Maybe
Could it be that you just hate working, and want to retire early and really will be happy drinking beer in another country? Maybe
Could it be that you have baggage from your upbringing? Most likely
Do you have enough? Maybe, depending on what you can get your expenses down too. If I recall way back you were a young project manager that liked spending on his toys. You have to ask will retiring give you the toys you want, or where the toys a distraction?

Everyone is just making assumptions here. It comes down to you taking the time with your spouse to explore what will make you happy. I have personally found running towards something makes you happier than running away from something. You said you didn't have kids, but didn't mention if that's something you and your partner wants. That may be major decision that would impact your choices.

I think a few years ago, you had posted something similar (more about your spending) and my advice was to save some of your money when you are young and have such a high income so you have the choice to not work later. I think that is the same thing here. You make a great income, so if you hate working, then working on increasing your nest egg from $500K will give you more flexibility to FIRE. That would be my first piece of advice, is figure a way to either reduce your expenses or increase your income or both. While you are doing that, have the conversations of what you and your spouse really want. Come back with some answers.
I did look again at the OP Plugging Along but somehow missed the $500k nest egg. Amazing how the brain can miss what they eyes are seeing.

I agree with all you have written, the OP comes back to engage or the thread lives without reference to the OP.
 

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I did look again at the OP Plugging Along but somehow missed the $500k nest egg. Amazing how the brain can miss what they eyes are seeing.

I agree with all you have written, the OP comes back to engage or the thread lives without reference to the OP.
I miss things in posts all the time. Without the OP, we can just talk about how we would live which probably has little relevance to OP's scenario.

Because I kind of remember the OP from before. I am guessing he needs a little soul searching. He has to decide what he and his wife wants not his parents. He needs decide what is important to him and his wife, and go from there.

Me: Could my spouse and I live off of $500K at 35. Heck no, we just had our second kid then and our lifestyle choices was much higher at that time. Without kids, could we have lived off $500K at that time, probably, but we would not have wanted to. If we didn't have kids, we could have retired in our early 40's easily. We made the choice to have kids and have a certain lifestyle, so now our retirement date is current based on the anticipated age in which we expect our kids to 'launch'. We planned to help each kid to their first post graduate degree or 25 (whatever comes later). This is irrelevant to OP. Without kids, I can totally see people FIRE, but even that's individual.
 

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Mukhang, I enjoyed reading your thoughts. Never fear though, I believe that Garth Turner manages their portfolios. He’s never set a foot wrong, has he?;-)
 

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Mukhang, I enjoyed reading your thoughts. Never fear though, I believe that Garth Turner manages their portfolios. He’s never set a foot wrong, has he?;-)
Oh that's right, I forgot that Garth was involved in all this.

I don't want to sound overly negative. I think it's totally possible to completely stop working and "retire" in the 30s, especially for people like twowheeled, and the couple in the articles, who have very high incomes. It's possible!

But from a financial security standpoint, I think one should stay below a 3% withdrawal rate because of the very long time horizon (see post #44 above). My own calculation looks like this:

Current annual spending: 38k per year
Estimated 'retired' spending: 45k per year (margin of safety)
Withdrawal rate: 3.0%
After tax capital required: 45 / 0.03 = $1.5 million
 

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Discussion Starter #53 (Edited)
thanks for all the responses. I have been reading along even though I haven't had the chance to respond yet. There's a lot of valid points and I do agree with some of the numbers suggested. I do believe I would need approx 2-2.5M for the passive income to retire on around 50k per year.

Sleeping in a hammock is an exaggeration. But I wouldn't be bored in early retirement. As someone suggested it is not the allure of being lazy and doing nothing. It is the freedom of having my time entirely to myself, to use as I please that gives me the most satisfaction. I tend to engross myself in my hobbies and learning new skills, but I don't care to mix pastimes and work. On my sabbatical I dedicated about 10 hours a week to professional photography, doing gig work. While not challenging it completely destroyed the passion I ever had for that. Once I am doing something for someone else for compensation, that activity completely changes.

My wife is a recent immigrant from Vietnam. She has dived into the same "work to death" pattern since moving here. I'm away from the apartment for 12 hours a day, and she works 40 hours a week and takes care of the house work. This lifestyle is bizarre to her as well. The most frustrating aspect of this is despite earning a good combined income of ~220k a year, sacrificing our spare time for shift work, we do not at all feel the least bit wealthy. I'm a frugal person by nature and I don't want silly material things like a Mercedes or a country club membership. But things that do bring us real value, being able to claw back our time, seems out of reach.

For example, my evenings consist of getting home and having about 3 hours to myself, eating a microwaved dinner, walking the dog, packing my lunch and doing some chores with maybe 30 mins of TV or down time for myself. I can't free up time, the most valuable thing to me. Things like a house cleaner/maid, using uber/cabs, eating out a few times a week still feel out of reach for our income level.

Don't get me wrong, I don't feel entitled to any of these things. I happily do them when I'm off work. But the frustration I'm feeling is that despite earning, what? double the median household income? not having any kids, not having debt hanging over our heads, we still feel like we are only slightly above poverty.

My work isn't physically or mentally demanding. I have a very simple job that I can do well. It is not "burn out". The commute, giving my employer an undivided attention span of 10 hours a day, just maintaining that presence is the majority of the effort. I don't feel that the compensation is adequate for giving away my time in such large chunks. IOW I value my time so highly that to give it away to an employer, I should be able to afford to hire or source out such other necessities as house keeping, cooking, transportation, grocery shopping, etc while still having enough for our inflated housing, retirement savings, etc.
 

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In regards to SWR, as I have already said, I am not a fan. It may work on paper but if you do some research you will find many examples of people who followed that path and then in the 2008 depression, saw the wheels fall of their wagon.
The SWR concept is just a reference point. A beginning. A way to compare how things would have gone historically under a similar withdrawal rate. It is not the be all end all.

I suggest an income allocation based on a 'Rule of 3's'. One third of income covers living expenses, one third is for discretionary spending and one third is for savings. That gives you a 66% 'cushion' for when things go badly. But how many people who plan to follow the SWR model do you think are planning for an income that allows them to put 1/3rd of it back into savings/investments? They plan only to take money OUT, not to have enough to put money IN.

I advocate the Rule of 3s but it is not an absolute, you can vary the allocations. A popular model is the 50/20/30 Budget Rule. That suggests 50% for living costs, 20% for savings, 30% for discretionary spending.
The point is to have a substantial cushion between living costs and total income.
This is for someone in the accumulation phase. Someone adding to their portfolio. There is no point in taking out of the portfolio to then add to it.

I have been retired now for 31 years and my net worth has increased (with a few little bumps along the way) throughout. Do you think I ever worry about 'running out of money'?
That tells me that your withdrawal rate is low, which is a good thing. You have also ridden on the coattails of long a bull market in stocks and bonds.

One of the criticisms of the SWR models is that it is too conservative. Someone following it is likely to leave a substantial inheritance.
 

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The SWR concept is just a reference point. A beginning. A way to compare how things would have gone historically under a similar withdrawal rate. It is not the be all end all.
It offers some good rules of thumb. I've found it useful for wrapping my head around how to convert capital and retirement savings into perpetual cashflow.

One of the criticisms of the SWR models is that it is too conservative. Someone following it is likely to leave a substantial inheritance.
I'm not sure SWR is too conservative. Yes the odds are that someone withdrawing a constant 4% will end up with a lot of money left over... in something like 95 out of 100 historical runs. But since each of us only lives once, if we happen to be one of those unlucky 5 out of 100, it's a disaster. We don't get a do-over.

Similarly, it's easy for an advisor to say to their client: "I think you can probably withdraw at 5% and you'll be OK". If they give the same advice to many clients, over many years, most of their clients will be fine.

But there might be one retiree who starts his retirement at precisely the worst time, and gets the unfortunate sequence of returns. He will either deplete his savings or have to reduce the withdrawals.

I find it's hard to reason about these probabilities. I'm not sure how comforting it is that 4% withdrawal works in 95% of historical simulations. And that's still based on US market performance, which has been stellar.

Ultimately there are no guarantees of market performance (ever) no matter how well things worked in the past. This is why there is a certain inescapable danger of early retirement if you barely have enough capital.
 

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I'm not sure SWR is too conservative. Yes the odds are that someone withdrawing a constant 4% will end up with a lot of money left over... in something like 95 out of 100 historical runs. But since each of us only lives once, if we happen to be one of those unlucky 5 out of 100, it's a disaster. We don't get a do-over.
No one is obligated to take the full 4% each and every year no matter what happens. It's a general guideline only. If you're 60 or older you'll probably be okay. If you're young then maybe build in a bit of a buffer. No one should be caught off guard because you can make adjustments at any time if required.

And don't forget CPP and OAS...if your expenses are low or moderate they can cover 1/4 to 1/3 of your needs. Then you only need to withdraw 3% to get by.
 

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I'm not sure SWR is too conservative. Yes the odds are that someone withdrawing a constant 4% will end up with a lot of money left over... in something like 95 out of 100 historical runs. But since each of us only lives once, if we happen to be one of those unlucky 5 out of 100, it's a disaster. We don't get a do-over.
I agree with you. I personally don't think it is too conservative, but some people do. I guess they are willing to take a higher risk of depletion for a better quality of life in early retirement. Personally, I prefer to play it safe.

I still think a 4% WR is going to be okay for a 30 year retirement span. Probably not for a young retiree, looking at 50+ years. Plus, if faced with an adverse sequence of returns, an older retiree could decide to annuitize to protect their retirement. A younger person may not have that option.
 

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I still think a 4% WR is going to be okay for a 30 year retirement span. Probably not for a young retiree, looking at 50+ years. Plus, if faced with an adverse sequence of returns, an older retiree could decide to annuitize to protect their retirement. A younger person may not have that option.
Looking at the Monte Carlo simulations again...

When dealing with a 60 year time horizon (much longer than those SWR studies) -- conventional 60/40 only appears to support 3.4% withdrawals with 90% successful outcomes.

But it seems you can get up to 3.8% with the Permanent Portfolio, a notable improvement. I used my own allocation of 20% gold, 30% stocks, 50% treasury bonds. Link to Monte Carlo sim here.

Of course, there's lots of uncertainty when dealing with such long time spans, no matter what the simulations say. A lot can change in 60 years.
 

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I seem to be the only one who doesn't find the original question odd or unreasonable. I decided when I was 16 years old that I wanted to be independently wealthy and some sort of investment program was the way to go. Have been plodding toward that goal now for 53 years. So the idea of retiring at 35 makes perfect sense. I guess I'm just weird.
 
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