I humbly submit the ultimate safe withdrawal strategy. This is in response to:
The Ultimate Safe Withdrawal Strategy
(In no particular order, likely incomplete, ideas welcome)
Edit to include links to the wiki for the referenced withdrawal models:
Variable percentage withdrawal (VPW)
https://www.bogleheads.org/wiki/Variabl ... withdrawal
Amortization based withdrawal (ABW)
https://www.bogleheads.org/wiki/Amortiz ... withdrawal
Total portfolio allocation and withdrawal (TPAW)
https://www.bogleheads.org/wiki/Total_p ... withdrawal
- My mental fluctuations between "I have more than enough" and "But what if..."
- Reading way too many withdrawal posts and running way too many scenarios/models
- My worries after reading so many posts about "the new SWR" (2% is the new SWR, etc.)
The Ultimate Safe Withdrawal Strategy
(In no particular order, likely incomplete, ideas welcome)
- Use a withdrawal model with math that "can't" fail such as VPW, ABW, or TPAW
- Control core expenses such as food and shelter
- Insure plenty of flexibility in spending for non core expenses such as entertainment and travel
- Work longer / over save
- Work part-time during retirement
- Maintain the ability to go back to work if needed
- Adjust asset mix to reduce chances of portfolio failure
- Consider annuities
- Use a TIPS ladder or similar
- Consider LTC insurance
- Maximize and use social security to mitigate longevity risk
- If planning to X age, use good actuary life expectancy calculators (and if a couple, enter as such to get the probability either survives till X age)
- Hold off on large donations until late in life or expired (or do in good years)
- Hold off gifting large amounts to others until late in life or expired (or do in good years)
- Use reasonable conservative assumptions in calculations
- Run worst reasonable case scenarios
- Know your numbers
- Recalculate yearly
- Have contingency plans (sell house for equity, move to LCOL area, etc.)
Edit to include links to the wiki for the referenced withdrawal models:
Variable percentage withdrawal (VPW)
https://www.bogleheads.org/wiki/Variabl ... withdrawal
Amortization based withdrawal (ABW)
https://www.bogleheads.org/wiki/Amortiz ... withdrawal
Total portfolio allocation and withdrawal (TPAW)
https://www.bogleheads.org/wiki/Total_p ... withdrawal
Statistics: Posted by CalPoppy — Sat Oct 26, 2024 5:34 pm — Replies 12 — Views 1007