Another Question About SWR

[mikefixac]

When the question is raised, what is a safe withdrawal rate, ~4% is the number for a 25 year plus period.

When that 4% is used, does that mean every year it's 4% + inflation? Or 4% of portfolio.

IOW, in 10 years portfolio is down to $100K, do I just take out $4K or how does it work?

Probably foolish question, but I'm just not sure.

[bikebum]

The first year of retirement, you withdraw 4%, or whatever SWR you choose. Every year after, you withdraw the same dollar amount but adjust it for inflation. That's how the rule works; some people do different things though, like withdraw less when the market is down or more when the market is up.

[MDM]

See http://forum.mrmoneymustache.com/welcome-to-the-forum/50-60-year-retirement-timeframes-anyone-have-the-numbers/ for ~100 recent posts pertaining to this topic.

Google "Trinity Study" for the original work and updates.

[dragoncar]

Anyone seeking more info might look here:

http://www.bogleheads.org/wiki/Safe_withdrawal_rates
http://forum.mrmoneymustache.com/ask-a-mustachian/can-someone-explain-swr-(safe-withdrawal-rate)-to-me-in-the-context-of-this-post/
http://forum.mrmoneymustache.com/ask-a-mustachian/clarity-on-the-4-swr/
http://forum.mrmoneymustache.com/ask-a-mustachian/swr-is-4-of-what/
http://forum.mrmoneymustache.com/ask-a-mustachian/swr-is-4-of-what/
http://forum.mrmoneymustache.com/investor-alley/swr-4-and-4-of-what/