spending model
I retired at the age of 38 on
June 6, 2017, the day before the twentieth anniversary of my high school
graduation, with $1,025,772. I am married with no kids and generated over 95% of the family
income while employed. We live in LCOL rural TN. Our asset allocation goal was
approximately 60% VTSAX (total US
stock market) / 20% VFWAX (total INTL stock market) / 20% VWLUX (US municipal
bonds) before changing the model. We also hold nearly $2M in houses, land, and belongings not included
in the portfolio. My spending model places no dependence upon supplemental
income (future employment?), social security ($10k/yr?), inheritance ($500k?),
house equity (no heirs?), universal health care (probable?), or universal basic
income (possible?). The final balance will be left to charities and worthy
causes.
My max goal withdrawal rate is 2% of our net worth at the start of the year, provided that the portfolio itself remains above $1M. Should the portfolio drop below $1M, I will lock back into a maximum $2500 per month ($30k per year) guardrail withdrawal until the market recovers. I realize that this is not the holy Trinity method, but consider these three factors that give us flexibility: a 3% withdrawal rate is below the 100% historically safe mark of 3.2% for fifty-year portfolio survival, the extended bull market has made it where a catastrophic crash would have little effect (due to wise real estate investing); and our actual withdrawal rate was averaging less than 2% of the original portfolio balance (due to earning additional income).
My max goal withdrawal rate is 2% of our net worth at the start of the year, provided that the portfolio itself remains above $1M. Should the portfolio drop below $1M, I will lock back into a maximum $2500 per month ($30k per year) guardrail withdrawal until the market recovers. I realize that this is not the holy Trinity method, but consider these three factors that give us flexibility: a 3% withdrawal rate is below the 100% historically safe mark of 3.2% for fifty-year portfolio survival, the extended bull market has made it where a catastrophic crash would have little effect (due to wise real estate investing); and our actual withdrawal rate was averaging less than 2% of the original portfolio balance (due to earning additional income).