Early Retirement Extreme Forums

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

Based on my Tier definition of spending level (see my journal for explanation):
Based on Tier-3 spending : SWR is 2.2% (including real estate equity)
Based on Tier-4 spending : SWR is 2.7% (including real estate equity)
Based on Tier-3 spending level, I crossed the 4% SWR in early 2010

No clear idea about before, but discovered this website/forum in 2012.

In 2012 my estimated SWR was about 2%. Result of saving high income and avoiding too much lifestyle inflation. Also hate debt, so never got involved in borrowing except to buy a house and buy a business. Both were paid off a long time ago.

In 2014 my SWR is on track for 0.8%. Result of outstanding stock market and cutting spending in half. I believe that SWR of under 0.5% is very possible, but would need SO more on board for that. Staying under 1% will have to do.

@RealPerson: You own more than a hundred times your annual expenses? I would say that yes, that is enough. Congratulations

I didn't really discover ERE/SWR until early last year, but I kept decent records and roughed the previous percentages. Still working to reduce expenses and keep stashing more money away. My expenses are a good bit higher than the average seems to be around here, but we're getting there.

End 2011 - 58% SWR

End 2012 - 48% SWR

End 2013 - 25% SWR

End 2014 - 17-18% SWR (Projected)

Is there a formula for this? Here's what I came up with (I don't have a full year of expenses yet so I have to extrapolate average monthly expenses):
Average monthly expenses * 12 / FI Assets = SWR

My results:
$2322.89 * 12 / $90,768.30 = 30.7%

A thought: with a sub 1% SWR you'd need to get used to the sensation of watching your portfolio fluctuate by a whole years expenses frequently.

@Gilberto: yup, that's it. Now actually SWR stands for SAFE withdrawal rate, and of course a withdrawal rate of 30% is nowhere near "safe" (if you define "safe" as meaning that with this withdrawal rate you can live on your assets forever). So I would call it the WR, until it's below 4%, then I would start calling it the SWR

and @workathome: yeah, agreed. The stock market is pretty volatile, you would indeed see years of expenses evaporate (and then of course also come back...).

Doing the calculation (and subtracting a 20% estimated tax liability from tax deferred retirement accounts), my SWR at my current level of spending is about 4.57%. However, my SWR based on what I would like my retirement spending level to be, is 6.86%. I think I've got a few more years of work ahead of me, although it is a great feeling knowing how close I am to the crossover point.

Gilberto de Piento wrote:Is there a formula for this? Here's what I came up with (I don't have a full year of expenses yet so I have to extrapolate average monthly expenses):
Average monthly expenses * 12 / FI Assets = SWR

My results:
$2322.89 * 12 / $90,768.30 = 30.7%

i use this: http://www.mycalculators.com/ca/retcalc2m.html or this: http://www.dinkytown.com/java/Investmen ... ution.html

i'm not sure how people are putting up SWR rates over 6. you pretty much are never retiring if your SWR is greater than 6 and you're expecting to live longer than another 10 years.

leeholsen wrote:i'm not sure how people are putting up SWR rates over 6. you pretty much are never retiring if your SWR is greater than 6 and you're expecting to live longer than another 10 years.

SWR probably isn't the right word. I would say some (myself included) posted what percent our present expenses are of our total assets, while still in the accumulation phase, rather than what rate we realistically expect to live off .

slsdly wrote:

leeholsen wrote:i'm not sure how people are putting up SWR rates over 6. you pretty much are never retiring if your SWR is greater than 6 and you're expecting to live longer than another 10 years.

SWR probably isn't the right word. I would say some (myself included) posted what percent our present expenses are of our total assets, while still in the accumulation phase, rather than what rate we realistically expect to live off .

+1.

It's just a Withdrawal Rate (WR), rather than a SWR at that point. It's more of an Unsafe Withdrawal Rate (UWR).

But it's fun to look at what your WR would be at a given time, and see it edge closer to becoming a SWR.

2006-negative wr (student debt)
2008 80% WR
2010 24% WR
2014 8% WR
projected
2018 4% SRW (I cannot wait!)

Edited to reach 4% SWR at 41 not 135 years old

pka222 wrote: 2014 8% WR
projected
2108 4% SRW (I cannot wait!)

I think you're being a bit pessimistic here... You'll be over a hundred years old by that time!

I thought it was optimism: being able to live and work when over 100 yrs old.

George the original one wrote:I thought it was optimism: being able to live and work when over 100 yrs old.

Doh- that would be a stretch - just not the kind I am going for