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Author Topic: Safe Withdrawal Rate Question  (Read 2397 times)

factor22

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Safe Withdrawal Rate Question
« on: December 13, 2015, 09:27:16 AM »
Hi, Can someone please point me in the right direction to help with this question. When I consider my base to calculate the Safe Withdrawal Rate, do I exclude my primary residence value?  Thanks.
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matchewed

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Re: Safe Withdrawal Rate Question
« Reply #1 on: December 13, 2015, 09:43:58 AM »
Yes, your property value is not a liquid asset. SWR are based on portfolio. Unless you have plans on selling your primary residence.
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factor22

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Re: Safe Withdrawal Rate Question
« Reply #2 on: December 13, 2015, 10:11:09 AM »
Thanks matchewed
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Don Jean

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Re: Safe Withdrawal Rate Question
« Reply #3 on: December 13, 2015, 10:23:14 AM »
Is the answer the same for an investment property?
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matchewed

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Re: Safe Withdrawal Rate Question
« Reply #4 on: December 13, 2015, 10:35:26 AM »
You would factor the income from the investment property unless you were making a play for appreciation in which you would factor the sale of the property.
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MDM

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Re: Safe Withdrawal Rate Question
« Reply #5 on: December 13, 2015, 10:37:17 AM »
Quote from: Don Jean on December 13, 2015, 10:23:14 AM
Is the answer the same for an investment property?
Maybe.

See https://www.bogleheads.org/wiki/Safe_withdrawal_rates for more background.

You'll have to decide if the investment property behaves similarly enough to the stock and bond portfolios that were used to determine historical SWRs.  It could be the same, better, or worse.
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