Author Topic: 2018 - test your minimal FI assumptions 8%, 5.33..%, 4% spending for 2018  (Read 413 times)


  • Stubble
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I'm approaching the point where I believe I'm getting close to having my minimal (not planned) FI goals met. As a result I'm thinking about testing those assumptions by trying to spend only 4% of my retirement/taxable account value in 2018. That would make it a pretty austere year, but would also help accelerate savings to my ultimate less austere FI goal.

So here is the challenge based on how close to your MINIMAL FI number you think you are:

I think I'm/we're Halfway - spend 8% of your retirement/taxable account $ or net worth depending on how you are measuring your goal.
We're 3/4 of the way there - spend 5.333%
We think we're there - spend 4%
« Last Edit: September 18, 2017, 08:25:20 PM by pdxmonkey »


  • 5 O'Clock Shadow
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Re: 2018 - test your minimal FI assumptions 8%, 6%, 4% spending for 2018
« Reply #1 on: September 18, 2017, 05:26:43 PM »
Sounds like a good experiment.  Let us know how it goes.   I think there's a story about the Stoic philosopher Seneca who would reserve a few days each month to live with the minimal food / clothing just to expose himself to the condition that most people fear.   Similarly, Ben Franklin, in his autobiography says that he lived for a period (I can't recall how long) on just bread and water while sleeping on the floor rather than in his bed, just to demonstrate to himself that he could do so if he needed to.   Both of these examples are extreme of course, but if I understand your plan it is to live off of 4% of your current stash, meaning less than the 4% of your future FI number stash.

Perhaps a more direct correlation would be to use your planned FI stash baseline, but use the lower percentage that would represent your fallback spending level in a down market (3% or 2.5% rather than 4%).   You might end up with the same number either way, but it seems clearer as an experiment on the planned scenario. 


  • Stubble
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Re: 2018 - test your minimal FI assumptions 8%, 6%, 4% spending for 2018
« Reply #2 on: September 18, 2017, 08:13:37 PM »
That's correct. I plan to live off 4% of my current stash.

Planning to have the mortgage paid off by the end of 2017 making 2018 the first year in which I could conceivably actually live off $ generated by the stash. I want to know what it feels like to live on what I believe to be the very minimal stash amount required in this area to better inform future choices about actual FI number, etc. Living long term off the amount my stash would currently generate seems like it would be very stressful, worried about "unexpected" appliance break downs, other home repairs, car repairs, etc. Doing so while still employed doesn't seem like it should be stressful at all because I can always pull the parachute cord and go "well...that didn't work out."


  • Bristles
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Re: 2018 - test your minimal FI assumptions 8%, 5.33..%, 4% spending for 2018
« Reply #3 on: September 18, 2017, 08:56:26 PM »
Since I don't budget, does living under my takehome count?

I also have 20% savings (taxable, Roth, accelerated mortgage payments)  on  that takehome.


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I think practical exercises in testing our ability to live within our aspirational means are essential for those of us who aren't catapulted into having life-changing sums of money and whose FI is not the same as never having to think about what something costs.

I've got a similar experiment going on at the moment. My situation is different, because I'm getting close to retirement and the bulk of my retirement income will be from a DB pension. I've taken a minimum monthly household income figure based on stopping work at the end of June 2018 (my earliest provisional date), and DH and I are trying to live within that. We've been running the experiment for four months now and early impressions are that it could be done but that holding on for another nine months until my intended retirement date of March 2019 would give us a worthwhile increase in our non-essential spending in the first few years of retirement.

We've never budgeted, but I suspect there's an element of the Hawthorne effect going on at present. I'll be interested to see if our expenditure starts to drift up as we continue with the experiment. If so, that will be useful information.