I admit, I did not read all the pages of this thread. And I'm a newbie. Go ahead and shoot me, then I will not have to plan for retirement.getrichslowly wrote: ↑Tue Feb 13, 2018 9:12 am Many people worry whether a 4% SWR will work in the future. Complicated attempts have been made to calculate a new SWR.
Mainstream strategies use a total return approach and will liquidate a share of principal each year to meet the SWR payment. The assumption is that the assets will grow back. What if you drop this assumption altogether and just withdraw the dividends and bond interest payments? Is the actual reported "income" not a truer estimate of the sustainable income stream? Why not just forego fancy mathematical analysis and just trust what the market chooses to provide?
On the surface living on just dividends and interest seems like a reasonable (and desirable) strategy. If they provide what you need, then you can pass on the basis to your heirs, and live a happy life.
When dividends and interests are high you live high. When they are low you just scale back. As long as a scale back is enough to provide roof/food/water you should be good to go.
The problem with this, as I see it, is it may not keep up with inflation of costs. If costs go up faster than the money you bring in, then you have to touch principle. Then your dividends and interest go down.
But touching principle should be allowed. Unless you feel the need to provide for future generations to never have to work.
In the old days most people never "retired" as we know it. They kept working till they could no longer work. Their retirement was provided by the human resources of their children, and perhaps grandchildren. If they had 1-2 years of assets (aka food/shelter/water) they were happy.
Your idea of living off dividends and interest, really only works if you have lots and lots of money. IMO YMMV I could be wrong.