I’ve read a bunch about the subject and will probably do something like a fixed-percentage variable spending scheme, like Vanguard proposes. But I’m curious what people are actually doing in real life. Is anyone out there managing their retirement finances, and if so, how did you figure your SWR?
Edit: So here’s the system I’m thinking of using. The numbers are just an example.
First determine my SWR, which is what I’m having a problem with, but let’s say it’s $60,000/year. This comes out to $5000/month.
Initially, I’d fill up my bank account with $5000, and treat it like an allowance. Each month, I’d just top my account back up to $5000. On most months, I wouldn’t have spent the whole thing anyway. The next year, I’d make an adjustment for inflation, and that would be my new monthly allowance. Repeat until I’m dead.
Thoughts?
I’m earmarking 4% SWR with variance, but in reality the salary I’m planning to pay myself in retirement is more than 2x my current expenses, so I guess that makes my literal SWR closer to 2%. 🤷
More or less, I’m playing it by ear. Idk if I will even stop working in 5 years (my timeline) - depends on what the market is doing and how jaded I feel about my job. Riding the snowball for just a couple more years of work can net me a lot more money to retire with, but there’s really no logical stopping point if all you think about is how much money you’re going to make next year.