How or when to withdraw once retired?

[ransom132]

I am still far away from FIRE, but when the day comes, I have read about the SWR which most reccommend at 4%, but how does that work? Would I have to withdraw only once a year (at the beginning of the year) or do I withdraw from my funds once a month...how does that all work? Let's say I FIRE with a 1 million dollar net worth, do I withdraw at the beginning of the year 40 000$ so I can try to make it last the whole year? What if the market goes down, do I still withdraw 4%...I have been trying to find answers for that, but I never get a satisfying answer so hopefully my post will resolve that.

[arebelspy]

I am still far away from FIRE, but when the day comes, I have read about the SWR which most reccommend at 4%, but how does that work? Would I have to withdraw only once a year (at the beginning of the year) or do I withdraw from my funds once a month...how does that all work? Let's say I FIRE with a 1 million dollar net worth, do I withdraw at the beginning of the year 40 000$ so I can try to make it last the whole year?

Short answer: It's up to you.  Most people do a once/yr withdrawal.

Long answer: I'm gonna dump a bunch of links at you, rather than rehashing old stuff, but if you're interested in getting the answers to your questions, these are the things to read.  :)

LivingaFI Series:
http://livingafi.com/2014/05/09/drawdown-part-1-the-basics/
http://livingafi.com/2014/05/12/drawdown-part-2-simulation/
http://livingafi.com/2014/05/18/drawdown-part-3-strategy/
http://livingafi.com/2014/05/28/drawdown-part-4-examples/

http://forum.mrmoneymustache.com/post-fire/withdrawal-strategies-in-retirement/
http://forum.mrmoneymustache.com/investor-alley/pfau-on-variable-withdrawal-strategies/
http://forum.mrmoneymustache.com/investor-alley/variable-percentage-withdrawal-(vpw)/

If you still have questions after reading that, post 'em.  :)

What if the market goes down, do I still withdraw 4%

This isn't a question on withdrawal strategies, but on the 4% rule.  The classic 4% rule, from the Trinity study still had you withdraw 4% (plus inflation), regardless of stache size.  There are other methods besides the 4% rule--the variable withdrawal strategy (last link, above), being one.

Typically people don't stick rigidly to a "4%+inflation" withdrawal.  If times are good, they might go a little more. If markets are down, maybe they tighten their belt.

But the strict definition (that, again, no one follows in real life) is 4% + inflation each year.

[ransom132]

Thank you that was very helpful. I also noticed there are graphs out there that shows you how much you need to be FI at a minimum, does that number look at the gross net worth or net??? The reason I ask is because I have funds in TFSA and RRSP's, with the TFSA, I can withdraw funds without being taxed, but the RRSP is different, whenever you withdraw, they tax you on the amount. So let's say I have 1000$ in my RRSP, when I withdraw, i'll probably get back around 700$ and not the 1000$. 

[arebelspy]

Your number should include all expenses (taxes are an expense).