Early Retirement Extreme Forums

George the Original One, thanks for bumping the thread, it made me finally sit down and do the math

2/2014

Retire in home country - 9.6% [I am shocked that in theory, even without gaining on my capital I can avoid working for almost 10 years .....]
Retire in DW's home country - 5.9%

Given our savings rate of ~55% and assuming no positive surprises I am hoping these figures will go down as follows by the end of 2015:

Home country - 7.6%
DW's country - 3.5%

If some positive developments occur in this time-frame (certainly possible) we could get to 4% / 1.9% SWR .... makes me want to re-double my efforts!

Mine is tough to calculate due to the defined benefit plan from work and not having tracked expenses, but it looks something like this:

2007 50%
2008 49%
2009 45%
2010 30%
2011 25%
2012 10%
2013 8%

2013 is the first year that total return exceeded current expenses (e.g. about double retirement expenses) and dividend income exceeded federal poverty level (about 72% of retirement expenses).

2013: 8%

i read the ERE book in 2013, so i am late to this way of thinking; but i'm sold.

in 2013, i cut spending enough to be FI now on an 85 year lifespan.

i'm now FI at a 3% SWR.

my plan is to be FI at a 3.5% rate in 5 years. i know thats a little high for an ERE model, but i spent time thinking about the rest of the life i want for myself and i figure that will be about a 3.5% SWR.

to do this i'm keeping my swr rate down under 3% and have increased my savings rate to over 50%.

at that point i may change careers if i dont outright retire as i was working sunday night at 11pm this past week and no job is worth that.

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?

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%