Early Retirement Extreme Forums

DutchGirl wrote:Huh? Lee, did you know that your SWR should go DOWN, not UP? Yours seems to be going up, from 3% to 3.5%...

What are you calculating? Or was it a typo?

no, thats correct.

i figured that 3.5% is about what i estimate my expenses will be for what i want to do in retirement.

i'm holding it at 3 now and denying myself, so i can be at 3.5% later.

in constant $ terms, my current SWR is 3.55%, meaning I have 28.16 years of expenses saved.

Mine's hard to pin down exactly because of the time sensitivity of a small retirement annuity I may get from my employer if I stay long enough, and some uncertainty in what my "retired" expenses will be. But if I assume no annuity and based on last year's actual expenses I get the following:

6/30/12 8.4%
12/31/12 7.6%
12/31/13 5.3%

Projection assuming no to change to salary and 0% investment return

12/31/14 4.7%
12/31/15 4.2%

That's all pretty conservative. For the numerator, as I said, I'm using last year's actuals (which were biased upwards due to a couple moderate black swans). For the denominator I used my total invested assets at the time (or estimated going forward) plus a conservative estimate on how much home equity I'll free up when I move/downsize. I didn't plus-up the numerator for taxes, but I'm considering that conservatively a wash with ignoring the potential annuity. It's semantics but I don't consider those "S"WRs. At 3% or below I'll consider it "safe".

put this up here to show others starting out how fast things can change for you if you commit to ere mindset.

just over a year ago(3/2013), i read the ere book and dramatically increased my work 401k to 50%.

today, i checked my work 401k and its value has doubled from 3/2013; and thats after 4 years of contributing at 10%.

Wow, lots of great progress from everyone here!! Not sure exactly how everyone is calculating this, but i usually calculate 2 numbers (one with home equity and one without) and the first couple years i was counting my expenses were much higher due to renting in HI as part of temp work assignment, but income was also higher due to renting our home stateside that offset 75% of the rental expenses (I did include the expenses but not the income in my calcs).

2012/1 - 13% ( high due to rental expenses but was offset by some rental income which isn't in the calc)
2013/1 - 11% ( high due to rental expenses but was offset by some rental income which isn't in the calc)
2014/1 - 5.4% / 10% (only counting investments)
2015/1 - Target of 4%/ 6.7%
2018/1 - Target of 2.8% / 3.1%

Anyone at 1%?

J_ is at 1%

1% is pretty incredible. As long as some sort of disaster (war disaster?) or poor/risky investments are avoided, it should compound forever.

What do you do at 1%? I'd guess the biggest risks are frivolous lawsuits (get Umbrella insurance?) or some kind of economic/political/war/environmental disaster. I'd probably own some Gold in foreign safety deposits or productive real estate abroad (which you could always "flee" to and live in w/o tenants)... not sure.

2013: 2.88%

2014: 1.98%

I'm helping my sister through college. This year she finished and my SWR went down. I just recently learned about SWR.

I've gone under 1% in the winter months, but it isn't really representative. Winters I tend to stay at home and consume resources from warmer months (wood, frozen & canned food)... That also does not include alternative investments and hobby purchases (tools, materials mostly), so I'm not sure it really counts...

I think 1% is readily attainable on ERE timeline, but likely not in an expensive city, unless you are very skilled. I'm not in a particularly inexpensive area (cost of living index 90) but my energy, water, home & vehicle insurance, property taxes, internet and phone is under $200/mo.

@JohnnyH... You could pretend to be a company and split "expenses" and "costs" (these words are translated from my Dutch bookkeeping course). Expenses would be when you transfer money to someone else to buy something, costs would be when you actually use something. So for example, when you buy xxx kilos of wood in September for $500, that's $500 of expenses in September, but for example $150 of costs per month in December, January, February and the last $50 in March.

(Or of course you could also just average your expenses over the year...).

(Please try to keep it on-topic. No discussions. No hijacking. No celebrations. IF you want to discuss, please start another thread.)

First time I've calculated this. Nice to see.

2010: 8.9%
2011: 7.1%
2012: 5.9%
2013: 4.0%

2010 Few minor savings
2014 SWR 6% not adjusted for inflation, adjusted for inflation who knows, can`t trust the government official statistics, maybe 10% (btw this is Australia)
2016 Hopefully should be 3.6% again not adjusted for inflation

Maybe I catch up with the inflation in 2018.

4/2013 10.5%
4/2014 6%

You guys seem to be doing so well. Can any of you quantify the actual amount you have and that monthly drawdown in addition to percent? I seem to think 1-2% must imply hoards of money but obviously this is early retirement extreme which is usually more frugal when compared to the mainstream of other FI sites which in turn is frugal compared to the standard retirement paradigm.

For example, I own my own home. And have $110000 in investments and $17000 in cash but I still have 3 years to go to hit basic sustenance FI with my fun money/Hols coming from planned part time work or just less pressure felt at full time work or might start my own business.

I'm probably at 8% now for that basic sustenance FI

Chris

$7,000 / 2% = $350,000 or $700,000 for 1%.

2009 - Broke

2010 - 62.5 %

2011 - 13.8 %

2012 - 12.8 %

2013 - 10.7 %

End of year numbers:
2010: 16%
2011: 11%
2012: 8%
2013: 6%
2014: 4%

I've just nudged below 4% based on my last 12 months expenses. That said, my expenses are pretty high compared to others on here, so I should be able to do better. $51500 spent in the last 12 months, portfolio ~$1.3M