Author Topic: OMFG -- so a 2% SWR is now the new black?  (Read 2175 times)

lhamo

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OMFG -- so a 2% SWR is now the new black?
« on: November 20, 2015, 08:38:38 AM »
Oy.

http://www.usatoday.com/story/money/personalfinance/2015/11/20/myths-misconceptions-retirement/75517504/

Check out this whopper in  point # 4:

"Researchers at WealthVest, in a recent study appearing in Financial Advisor magazine, said a withdrawal rate closer to 2% is a more realistic bet for people counting on their portfolios to last for decades, after factoring in low bond yields, high stock prices, investment-management fees and other variables."

[bolded text added by me]

Um, yeah.  If I am going to pay my Financial Advisor (who is presumably using my money to pay for their subscription to said Financial Advisor magazine) a 1-2% fee for the privilege of putting my money into expensive stocks and low yield bonds, then I might as well just keep working 20 more years to accumulate twice the amount I need if I go DIY with Vanguard.....

Thanks, but no thanks.
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JordanOfGilead

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Re: OMFG -- so a 2% SWR is now the new black?
« Reply #1 on: November 20, 2015, 08:50:02 AM »
judging by a lot of the goals I've seen in the forums, even mustachians are planning on a 2-4% SWD as opposed to 4-7%

vivophoenix

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Re: OMFG -- so a 2% SWR is now the new black?
« Reply #2 on: November 20, 2015, 08:52:40 AM »
so are they pretty much saying I can't have a 2% drawn down rate, because Ihave to make sure my advisor has a 2% draw down rate as well?

if i am understanding this correctly, i shouldn't actually  be working i should just piggyback off of someones retirement plan?

nobodyspecial

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Re: OMFG -- so a 2% SWR is now the new black?
« Reply #3 on: November 20, 2015, 09:31:28 AM »
so are they pretty much saying I can't have a 2% drawn down rate, because Ihave to make sure my advisor has a 2% draw down rate as well?
No you should assume a 2% market rate because markets are flat and bonds are worthless, but you need to pay 2% fee so assume a 0% SWR

Dicey

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Re: OMFG -- so a 2% SWR is now the new black?
« Reply #4 on: November 20, 2015, 10:15:41 AM »
Oy!
I firmly believe that the vast network of people who make money off of other people's hard earned savings has a huge interest in keeping said people scared about the difficulty - nay, the impossibility of retiring ever, much less early.
Oy!
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MrMoogle

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Re: OMFG -- so a 2% SWR is now the new black?
« Reply #5 on: November 20, 2015, 12:03:21 PM »
judging by a lot of the goals I've seen in the forums, even mustachians are planning on a 2-4% SWD as opposed to 4-7%
4-7% is fine for normal retirees, who will be getting social security shortly after retiring, and only expecting 2-3 decades of retirement.
3-4% is more realistic if you're expecting 5-6 decades, like I'm hoping.