25X 33X 50X 100X ?

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swayswift
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25X 33X 50X 100X ?

Post by swayswift »

Why is there always such a big controversy on the SWR as a function of age. Here is my take :
50 -33X
60- 25X

Isn't there lot of academic research backing above numbers ? I started this thread that was locked for some reason but some people feel 50X is needed at age 50!

viewtopic.php?f=2&t=431696&newpost=7865 ... ead#unread

Some research on these that justify my numbers above :
https://earlyretirementnow.com/safe-wit ... te-series/
steadyosmosis
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Re: 25X 33X 50X 100X ?

Post by steadyosmosis »

swayswift wrote: Mon May 13, 2024 7:32 pm Why is there always such a big controversy on the SWR as a function of age.(sic)
People are different.
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Re: 25X 33X 50X 100X ?

Post by jebmke »

steadyosmosis wrote: Mon May 13, 2024 7:47 pm People are different.
behavioral/psychological aspect of personal finance is often underestimated.

Then there are all of us who never had "a number" to begin with .
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cacophony
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Re: 25X 33X 50X 100X ?

Post by cacophony »

I think the problem for a lot of people is that expenses are difficult to quantify, especially for 30-50 years into the future. So it brings comfort to have a bit of a fudge factor.
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Re: 25X 33X 50X 100X ?

Post by runner3081 »

Why do some people drive faster than others? Eat more food than others? Exercise more than others?
Normchad
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Re: 25X 33X 50X 100X ?

Post by Normchad »

There is no academic research that tells you what the future is going to be.

And people are different. With different risk tolerances, and different margins of flexibility. So if your X is “barely surviving” and my X is that, plus another 10k/month for galavanting, then we probably feel different,y about the soundness of 25X.

And there are also a lot of people on these boards that are certain that the future will be way way worse than the past has ever been. Those are the 2% is reckless camp. Worse than the Great Depression. Worse than 1966. Worse than the GFC. A near apocalypse.

Here’s what I really think is going on. Nobody will fess up though. For some of us, life has devolved into a sort of video game. And our portfolio is the score. And we’re just conditioned to drive that number up as high as possible, and will contort every other decision to support it. That’s how you win life, die with the biggest unspent pile of money.

Personally, I won’t be using a strict SWR methodology in retirement. But if I was, I’d be completely comfortable at 33X, and willing to bet my life that it would last FOREVER. I.e. it is the perpetual rate. So 33X would be good at any age.

Also there is this. Some people that end up at 40X, 50X, 100X, didn’t do it on purpose. It can kind of sneak up on you. When the market has a good run, those numbers can multiply quickly. If you were 25X at the start of 2023, you’re probably at least at 30X now. And some people don’t seriously look at the numbers until just a year or two before retirement. So they get pleasantly surprised.

I always assumed I’d get zero from social security. When I looked at it seriously though, it turns out it will provide about 40% of my intended lifestyle. So that dramatically improved my situation, from say 33X to nearly 50X.
Last edited by Normchad on Mon May 13, 2024 8:05 pm, edited 2 times in total.
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Charles Joseph
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Re: 25X 33X 50X 100X ?

Post by Charles Joseph »

Just wing it. You'll be fine. The financial industry uses scare tactics because they want as much money as possible stuffed into their coffers.

People don't need nearly as much money for retirement as the financial industry claims.
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zie
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Re: 25X 33X 50X 100X ?

Post by zie »

Unless you have X years in expenses perfectly lined up with your lifetime and invested in something like TIPS, there is always some risk in your withdrawal plan.

I.e. if you know you will live 10 years and you have 10 years of expenses in a TIPS ladder, then your risk is effectively 0.

If you know you will only live 30 years, but you only have 25X invested, then there is *some* risk, as that extra 5 years of expenses has to come from excess return above 0% real, which you may or may not get over the next 30 years(though of course for a 50% or 60% equities position, the chances are high, and usually only fails if your start is miserable and you don't adjust spending).

Since there is risk here, everyone has to measure and quantify their level of comfort for the risk they are taking. Some want their retirement to be effectively 0 risk, and a TIPS ladder is almost certainly the right answer for them. Others are happy taking on lots of risk and are comfortable with 25X expenses for a 50+ yr retirement.

Nobody can tell you what the right answer is for your comfort level, much like nobody can tell you what your asset allocation should be during accumulation.
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MarkRoulo
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Re: 25X 33X 50X 100X ?

Post by MarkRoulo »

swayswift wrote: Mon May 13, 2024 7:32 pm Why is there always such a big controversy on the SWR as a function of age. Here is my take :
50 -33X
60- 25X

Isn't there lot of academic research backing above numbers ? I started this thread that was locked for some reason but some people feel 50X is needed at age 50!

viewtopic.php?f=2&t=431696&newpost=7865 ... ead#unread

Some research on these that justify my numbers above :
https://earlyretirementnow.com/safe-wit ... te-series/
No, there isn't "a lot of academic research" backing the above numbers.

The 25x is the historic successful number for 30 year retirements for the United States investments (stocks and bonds) looking back to about 1926. That is all.

The controversy mostly is about how confident one can be that the "next" 30 years (starting from whenever date in the future you wish) will look similar to the last ~100 years in the USA. Some folks are VERY confident -- hey, the US experienced a world war, the great depression and some pretty bad inflation and 25x worked! Others are less confident -- Japan had a lost three decades (starting in 1990), the US stock market is at a higher P/E ratio, the US government seems to be running up the debt insanely without a war, etc.

But, no, there isn't "a lot of academic research" backing the above numbers.
rockstar
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Re: 25X 33X 50X 100X ?

Post by rockstar »

25x is for 30ish years. If you retire at 65, you should have more than enough to make it to 95 ignoring social security.

It really boils down to how long you expect to live.
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Re: 25X 33X 50X 100X ?

Post by Wannaretireearly »

swayswift wrote: Mon May 13, 2024 7:32 pm Why is there always such a big controversy on the SWR as a function of age. Here is my take :
50 -33X
60- 25X

Isn't there lot of academic research backing above numbers ? I started this thread that was locked for some reason but some people feel 50X is needed at age 50!

viewtopic.php?f=2&t=431696&newpost=7865 ... ead#unread

Some research on these that justify my numbers above :
https://earlyretirementnow.com/safe-wit ... te-series/
Yep. Should be as simple as you state.
Now define X and your golden! Does it go up from last year, down, or same. Reality is once you hit the type of nw at the multiples you state, I think the variances in X are not impactful 90% of the time (especially as the pattern here is to ignore SS, which will more than fill in for X variances).
Last edited by Wannaretireearly on Tue May 14, 2024 12:09 am, edited 1 time in total.
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Re: 25X 33X 50X 100X ?

Post by muffins14 »

Charles Joseph wrote: Mon May 13, 2024 7:58 pm Just wing it. You'll be fine. The financial industry uses scare tactics because they want as much money as possible stuffed into their coffers.

People don't need nearly as much money for retirement as the financial industry claims.
Good luck with that.

At least put aside something so you can afford decent long term care for a spouse
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Thesaints
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Re: 25X 33X 50X 100X ?

Post by Thesaints »

The withdrawal rate problem does not depend on individuals' choices/needs/preferences/expenses.
Simply stated, it asks: Given a certain portfolio, what is the withdrawal rate (in real terms) that one can sustain for N years with a chance of failure ≤F% ?
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Re: 25X 33X 50X 100X ?

Post by seajay »

cacophony wrote: Mon May 13, 2024 7:55 pm I think the problem for a lot of people is that expenses are difficult to quantify, especially for 30-50 years into the future. So it brings comfort to have a bit of a fudge factor.
Yes each individuals 'inflation' rate differs (as can a individuals inflation rate (circumstances) unexpectedly change). For me my tomorrows spending will consist largely of buying a house, some stock ...etc. relatively little spent on consumer goods/services i.e. buy and hold is the same as the cost-free rolling of assets daily. CPI tends to lag house, stock, gold ...etc. prices inflation due to productivity, broadly by around 2%/year.

SWR (25x, 33x) etc. are just guidelines, better in the absence of anything else.
YeahBuddy
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Re: 25X 33X 50X 100X ?

Post by YeahBuddy »

why stop at 100X? 110X 150X, 200X, 1000X. everyone's different.
what's just as hard to predict is yearly spending.
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faanger101
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Re: 25X 33X 50X 100X ?

Post by faanger101 »

YeahBuddy wrote: Tue May 14, 2024 3:50 am why stop at 100X? 110X 150X, 200X, 1000X. everyone's different.
what's just as hard to predict is yearly spending.
I bet bezos has > 1000x, but keeps working :sharebeer
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Re: 25X 33X 50X 100X ?

Post by Sandtrap »

swayswift wrote: Mon May 13, 2024 7:32 pm Why is there always such a big controversy on the SWR as a function of age. Here is my take :
50 -33X
60- 25X

Isn't there lot of academic research backing above numbers ? I started this thread that was locked for some reason but some people feel 50X is needed at age 50!

viewtopic.php?f=2&t=431696&newpost=7865 ... ead#unread

Some research on these that justify my numbers above :
https://earlyretirementnow.com/safe-wit ... te-series/
There is a huge comfort zone to having a huge or substantial forever pension with cola, and large SS, in retirement. This makes the (something)XX numbers moot. Except one can socially talk about one's "portfolio". (humor)

OTOH 50X in retirement is not very comforting or secure if there is no pension and small to nil SS payments and no other income stream.
(depends on each person and financial structure of that 50x portfolio.) (dis laimer).

So, the (something) x "X" numbers are highly individual and personal and moot as a generalization thinking that that generalization will fit people like a "one size fits all" shoe.

This is the huge value of forum "personal" portfolio reviews by seniors. It keeps financials and ie:50x directly applicable and substantive and actionable, for each person uniquely.

j :D
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KlangFool
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Re: 25X 33X 50X 100X ?

Post by KlangFool »

OP,

Your X may not be the same as my X.

A) Person A's X is the bare minimum. Aka, if A is not meeting X, he would be homeless and starving on the street.

B) Person B's X is 25% essential and 75% discretionary. In the worst case, person B just take a few foreign trips and vacations.

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Re: 25X 33X 50X 100X ?

Post by AlohaBill »

Before we retired, I checked how much we spent each year from 2010 to 2013. One year we spent $33,000 but we averaged $45,000. I figured we needed $55,000 to spend to pay for my medical insurance. So, I set a range for spending: $33,000 to $75,000.
We would spend more when we would buy a new car ($33,000), put in a new HVAC ($16,000 this week), or a new roof (est.$22,000).
Our pension/ss is about $77,000 so it covers everything. If we wanted to spend 4% from our savings , we could spend around $140,000 a year. However, I see this money as long term care for my wife and/or an inheritance for our children.
I bought into the discussion that you can have an SWR of 4%. I miscalculated how much social security and pensions would finally be and how much we would save over the years. I also erred in how much my medical insurance would cost.
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Re: 25X 33X 50X 100X ?

Post by rockstar »

KlangFool wrote: Tue May 14, 2024 8:38 am OP,

Your X may not be the same as my X.

A) Person A's X is the bare minimum. Aka, if A is not meeting X, he would be homeless and starving on the street.

B) Person B's X is 25% essential and 75% discretionary. In the worst case, person B just take a few foreign trips and vacations.

KlangFool
I’ve been thinking of using take home pay plus expected healthcare costs as a conservative proxy for X planning.
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Re: 25X 33X 50X 100X ?

Post by Clever_Username »

rockstar wrote: Tue May 14, 2024 10:12 am
KlangFool wrote: Tue May 14, 2024 8:38 am OP,

Your X may not be the same as my X.

A) Person A's X is the bare minimum. Aka, if A is not meeting X, he would be homeless and starving on the street.

B) Person B's X is 25% essential and 75% discretionary. In the worst case, person B just take a few foreign trips and vacations.

KlangFool
I’ve been thinking of using take home pay plus expected healthcare costs as a conservative proxy for X planning.
That's incredibly conservative; among other things, a sizable fraction of your take-home pay is used for savings, which isn't an "expense" you'll have in retirement.
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Re: 25X 33X 50X 100X ?

Post by KlangFool »

rockstar wrote: Tue May 14, 2024 10:12 am
KlangFool wrote: Tue May 14, 2024 8:38 am OP,

Your X may not be the same as my X.

A) Person A's X is the bare minimum. Aka, if A is not meeting X, he would be homeless and starving on the street.

B) Person B's X is 25% essential and 75% discretionary. In the worst case, person B just take a few foreign trips and vacations.

KlangFool
I’ve been thinking of using take home pay plus expected healthcare costs as a conservative proxy for X planning.
rockstar,

"It depends"

Depending on your gross saving rate on income or saving rate based on expense, it may or may not be conservative.

As per my observation, there is a major difference between the following 2 groups of people in terms of expense control and expense estimation.

A) "Save first and spend later" aka "Pay Yourself First"

B) "Spend first and save later"

For group (A), it is obvious what the annual expense is. If someone has only 60K per year to spend, the person can only spend 60K.

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Re: 25X 33X 50X 100X ?

Post by KlangFool »

Clever_Username wrote: Tue May 14, 2024 10:44 am

That's incredibly conservative; among other things, a sizable fraction of your take-home pay is used for savings, which isn't an "expense" you'll have in retirement.
Clever_Username,

That is an assumption. Or the person could be saving close to nothing. The retirement is funded by some kind of windfall. That is possible too.

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Re: 25X 33X 50X 100X ?

Post by rockstar »

Clever_Username wrote: Tue May 14, 2024 10:44 am
rockstar wrote: Tue May 14, 2024 10:12 am
KlangFool wrote: Tue May 14, 2024 8:38 am OP,

Your X may not be the same as my X.

A) Person A's X is the bare minimum. Aka, if A is not meeting X, he would be homeless and starving on the street.

B) Person B's X is 25% essential and 75% discretionary. In the worst case, person B just take a few foreign trips and vacations.

KlangFool
I’ve been thinking of using take home pay plus expected healthcare costs as a conservative proxy for X planning.
That's incredibly conservative; among other things, a sizable fraction of your take-home pay is used for savings, which isn't an "expense" you'll have in retirement.
I’m using my take home pay, which is after maxing out both 401k and HSA. It’s really conservative. I save some too on top of that into taxable plus all of my bonuses are 100% invested.

And I’m about 20x that number, so I feel good about it. What I have no clue about is future health issues since I’m not even 50.
ThankYouJack
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Re: 25X 33X 50X 100X ?

Post by ThankYouJack »

I like 25x with some flexibility. I think most people who FIRE have flexibility so that should be factored in IMO.
ReadyOrNot
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Re: 25X 33X 50X 100X ?

Post by ReadyOrNot »

The calculations require assumptions about the probability distributions of investments. The actual probabilities are not known, but the probability of some sequence worse than the past is certainly greater than zero. The probability of some bad sequence in 50 years should be greater than in 30 years, but no one knows either number. The probabilities for non-US investments probably lead to much worse safe withdrawal rates, but nobody knows whether non-US investments will actually be better or worse.

Many retirees have saved an infinite multiple of costs. Anyone with pension or Social Security income or any income which covers their expected expenses and any savings has an infinite multiple of expenses.
abc132
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Re: 25X 33X 50X 100X ?

Post by abc132 »

I like the strategy of picking an X and then working past that if it comes much earlier than expected.

Goal: Retire by 60 @25x with 15% savings rate
Outcome: Hit 25x by age 50 in a good sequence (2009-2024!)
Actionable: Keep working until you hit 30x. If there is a big market drop before hitting 30x you might stop when you hit 25x again in a downturn.

The X is the retirement goal and you get to decide how flexible you are in your spending,
sailaway
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Re: 25X 33X 50X 100X ?

Post by sailaway »

abc132 wrote: Tue May 14, 2024 12:51 pm I like the strategy of picking an X and then working past that if it comes much earlier than expected.

Goal: Retire by 60 @25x with 15% savings rate
Outcome: Hit 25x by age 50 in a good sequence (2009-2024!)
Actionable: Keep working until you hit 30x. If there is a big market drop before hitting 30x you might stop when you hit 25x again in a downturn.

The X is the retirement goal and you get to decide how flexible you are in your spending,
For us this looked more like:

Achieve 25x --> save to 30x --> downshift to a job that more than covers x --> increase travel spending and giving to keep pace with growing portfolio --> realize that a purchase that wasn't even on our dream list is actually within a fairly easy reach with a just a few more years at the downshifted income.
abc132
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Re: 25X 33X 50X 100X ?

Post by abc132 »

sailaway wrote: Tue May 14, 2024 1:04 pm
abc132 wrote: Tue May 14, 2024 12:51 pm I like the strategy of picking an X and then working past that if it comes much earlier than expected.

Goal: Retire by 60 @25x with 15% savings rate
Outcome: Hit 25x by age 50 in a good sequence (2009-2024!)
Actionable: Keep working until you hit 30x. If there is a big market drop before hitting 30x you might stop when you hit 25x again in a downturn.

The X is the retirement goal and you get to decide how flexible you are in your spending,
For us this looked more like:

Achieve 25x --> save to 30x --> downshift to a job that more than covers x --> increase travel spending and giving to keep pace with growing portfolio --> realize that a purchase that wasn't even on our dream list is actually within a fairly easy reach with a just a few more years at the downshifted income.
Yes, we have a lot of good outcomes recently.

It could also look like:
Goal: Retire by 55 @35x with 35% savings rate
Outcome: Hit only 25x by age 55 in a poor sequence
Actionable: Work 3 more years and call it quits short of the 35x goal - you don't need as much X if you work more years.
LFKB
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Re: 25X 33X 50X 100X ?

Post by LFKB »

swayswift wrote: Mon May 13, 2024 7:32 pm Why is there always such a big controversy on the SWR as a function of age. Here is my take :
50 -33X
60- 25X

Isn't there lot of academic research backing above numbers ? I started this thread that was locked for some reason but some people feel 50X is needed at age 50!

viewtopic.php?f=2&t=431696&newpost=7865 ... ead#unread

Some research on these that justify my numbers above :
https://earlyretirementnow.com/safe-wit ... te-series/
Many people on here are extremely (and overly) conservative. The 30 year treasury is at 4.6% but they will want people to retire at a 3% SWR.

Everyone has to make their own decisions, but a lot of the conservatism here leads to people not enjoying as much of their money as they should during their lives.
sailaway
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Re: 25X 33X 50X 100X ?

Post by sailaway »

abc132 wrote: Tue May 14, 2024 1:09 pm
sailaway wrote: Tue May 14, 2024 1:04 pm
abc132 wrote: Tue May 14, 2024 12:51 pm I like the strategy of picking an X and then working past that if it comes much earlier than expected.

Goal: Retire by 60 @25x with 15% savings rate
Outcome: Hit 25x by age 50 in a good sequence (2009-2024!)
Actionable: Keep working until you hit 30x. If there is a big market drop before hitting 30x you might stop when you hit 25x again in a downturn.

The X is the retirement goal and you get to decide how flexible you are in your spending,
For us this looked more like:

Achieve 25x --> save to 30x --> downshift to a job that more than covers x --> increase travel spending and giving to keep pace with growing portfolio --> realize that a purchase that wasn't even on our dream list is actually within a fairly easy reach with a just a few more years at the downshifted income.
Yes, we have a lot of good outcomes recently.

It could also look like:
Goal: Retire by 55 @35x with 35% savings rate
Outcome: Hit only 25x by age 55 in a poor sequence
Actionable: Work 3 more years and call it quits short of the 35x goal - you don't need as much X if you work more years.
Yeah, our plan has been based on the idea that surely a big recession is due imminently. Certainly looked iffy when we downshifted in 2022!

My older brothers are not at all prepared for retirement, in part due to long term unemployment during the last two recessions. And one just got laid off in his mid 50s. The specter of long term unemployment has certainly played a role in our decisions to only make lifestyle upgrades after certain goals were achieved. (I mean, besides the boat and the yacht club, obviously...)

We seriously considered a Very Big Purchase last year. In the end, an important factor in waiting and looking for alternatives was that with that purchase we would no longer have been FI. Work optional is particularly important for DH, who has fibromyalgia. 40 is the new 70 when you have a condition like that...
abc132
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Re: 25X 33X 50X 100X ?

Post by abc132 »

sailaway wrote: Tue May 14, 2024 1:34 pm Yeah, our plan has been based on the idea that surely a big recession is due imminently. Certainly looked iffy when we downshifted in 2022!

My older brothers are not at all prepared for retirement, in part due to long term unemployment during the last two recessions. And one just got laid off in his mid 50s. The specter of long term unemployment has certainly played a role in our decisions to only make lifestyle upgrades after certain goals were achieved. (I mean, besides the boat and the yacht club, obviously...)

We seriously considered a Very Big Purchase last year. In the end, an important factor in waiting and looking for alternatives was that with that purchase we would no longer have been FI. Work optional is particularly important for DH, who has fibromyalgia. 40 is the new 70 when you have a condition like that...
Congrats! It sounds like you have a good Boglehead strategy that should do well.

One strategy we don't hear much here is the 22/33/55 strategy of getting a 4 year degree by age 22, working 33 years, and retiring by age 55.

I think if you plan for retirement age 55 you do reasonably well in most scenarios. Job loss could take you to 60 or early retirement could force you out sooner - but in most cases you will still be successful.
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Re: 25X 33X 50X 100X ?

Post by JoeJohnson »

LFKB wrote: Tue May 14, 2024 1:31 pm
swayswift wrote: Mon May 13, 2024 7:32 pm Why is there always such a big controversy on the SWR as a function of age. Here is my take :
50 -33X
60- 25X

Isn't there lot of academic research backing above numbers ? I started this thread that was locked for some reason but some people feel 50X is needed at age 50!

viewtopic.php?f=2&t=431696&newpost=7865 ... ead#unread

Some research on these that justify my numbers above :
https://earlyretirementnow.com/safe-wit ... te-series/
Many people on here are extremely (and overly) conservative. The 30 year treasury is at 4.6% but they will want people to retire at a 3% SWR.

Everyone has to make their own decisions, but a lot of the conservatism here leads to people not enjoying as much of their money as they should during their lives.
Why exactly does the 30-year treasury at 4.6% imply that 3% is too conservative?
LFKB
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Re: 25X 33X 50X 100X ?

Post by LFKB »

JoeJohnson wrote: Tue May 14, 2024 2:06 pm
LFKB wrote: Tue May 14, 2024 1:31 pm
swayswift wrote: Mon May 13, 2024 7:32 pm Why is there always such a big controversy on the SWR as a function of age. Here is my take :
50 -33X
60- 25X

Isn't there lot of academic research backing above numbers ? I started this thread that was locked for some reason but some people feel 50X is needed at age 50!

viewtopic.php?f=2&t=431696&newpost=7865 ... ead#unread

Some research on these that justify my numbers above :
https://earlyretirementnow.com/safe-wit ... te-series/
Many people on here are extremely (and overly) conservative. The 30 year treasury is at 4.6% but they will want people to retire at a 3% SWR.

Everyone has to make their own decisions, but a lot of the conservatism here leads to people not enjoying as much of their money as they should during their lives.
Why exactly does the 30-year treasury at 4.6% imply that 3% is too conservative?
I'm sure you can figure that one out on your own
gtrplayer
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Re: 25X 33X 50X 100X ?

Post by gtrplayer »

JoeJohnson wrote: Tue May 14, 2024 2:06 pm
LFKB wrote: Tue May 14, 2024 1:31 pm
swayswift wrote: Mon May 13, 2024 7:32 pm Why is there always such a big controversy on the SWR as a function of age. Here is my take :
50 -33X
60- 25X

Isn't there lot of academic research backing above numbers ? I started this thread that was locked for some reason but some people feel 50X is needed at age 50!

viewtopic.php?f=2&t=431696&newpost=7865 ... ead#unread

Some research on these that justify my numbers above :
https://earlyretirementnow.com/safe-wit ... te-series/
Many people on here are extremely (and overly) conservative. The 30 year treasury is at 4.6% but they will want people to retire at a 3% SWR.

Everyone has to make their own decisions, but a lot of the conservatism here leads to people not enjoying as much of their money as they should during their lives.
Why exactly does the 30-year treasury at 4.6% imply that 3% is too conservative?
Put all of your money in a 30 year treasury and you can live off 4.6% a year for 30 years.

The withdrawal rates are general guidelines. It’s unlikely anyone has ever withdrawn exactly the same amount for 30 years. How many retirees spend a giant sum on a vacation one year and completely blow up their withdrawal plan… and they’re fine.
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Lawrence of Suburbia
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Re: 25X 33X 50X 100X ?

Post by Lawrence of Suburbia »

After fretting about SWRs ever since joining Bogleheads (I retired in 2018 having never heard of them! :oops:), I've adopted this formulation. If one is considering a 30 year retirement, multiply your yearly spend (minus Social Security, pension etc.) by thirty. That's your base, minimum dollar amount to shoot for. If you're an early retirement aspirant, multiply by 50 (or whatever). That's a 3.33% WR for the first case, 2% for the second. Needless to say an asset allocation leaning heavily towards stocks is probably implied for a successful outcome.

A useful feature of this is, as the years go by, you can divide the balance by the years you believe you've got left, giving yourself a raise. In my case, based on my actuarial situation (and personal/family health history), I could draw between 5-6% (I don't, though. At the moment, ~2.2% suffices for my modest wants & needs).
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Thesaints
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Re: 25X 33X 50X 100X ?

Post by Thesaints »

There are two ways to retire with 50X: accumulate more capital through good investments and working for longer, or get a salary cut.
babystep
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Re: 25X 33X 50X 100X ?

Post by babystep »

gtrplayer wrote: Tue May 14, 2024 3:26 pm
JoeJohnson wrote: Tue May 14, 2024 2:06 pm
LFKB wrote: Tue May 14, 2024 1:31 pm
swayswift wrote: Mon May 13, 2024 7:32 pm Why is there always such a big controversy on the SWR as a function of age. Here is my take :
50 -33X
60- 25X

Isn't there lot of academic research backing above numbers ? I started this thread that was locked for some reason but some people feel 50X is needed at age 50!

viewtopic.php?f=2&t=431696&newpost=7865 ... ead#unread

Some research on these that justify my numbers above :
https://earlyretirementnow.com/safe-wit ... te-series/
Many people on here are extremely (and overly) conservative. The 30 year treasury is at 4.6% but they will want people to retire at a 3% SWR.

Everyone has to make their own decisions, but a lot of the conservatism here leads to people not enjoying as much of their money as they should during their lives.
Why exactly does the 30-year treasury at 4.6% imply that 3% is too conservative?
Put all of your money in a 30 year treasury and you can live off 4.6% a year for 30 years.

The withdrawal rates are general guidelines. It’s unlikely anyone has ever withdrawn exactly the same amount for 30 years. How many retirees spend a giant sum on a vacation one year and completely blow up their withdrawal plan… and they’re fine.
SWR is inflation adjusted. 4.6% treasury rate is nominal and fixed. In 15-20 years treasury interest amount would be less than the inflation adjusted SWR amount.
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HomerJ
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Re: 25X 33X 50X 100X ?

Post by HomerJ »

Normchad wrote: Mon May 13, 2024 7:57 pm Personally, I won’t be using a strict SWR methodology in retirement. But if I was, I’d be completely comfortable at 33X, and willing to bet my life that it would last FOREVER. I.e. it is the perpetual rate. So 33X would be good at any age.

Also there is this. Some people that end up at 40X, 50X, 100X, didn’t do it on purpose. It can kind of sneak up on you. When the market has a good run, those numbers can multiply quickly. If you were 25X at the start of 2023, you’re probably at least at 30X now. And some people don’t seriously look at the numbers until just a year or two before retirement. So they get pleasantly surprised.
This.

Lots of us here go past 25x-33x because we hit those numbers early, and it's no great sacrifice to work a little extra.

I've been a HUGE proponent of 25x (for people retiring at 60-65) and 30-33x (for people retiring in their 50s or earlier) on these boards. I think it's silly when people start threads like (2% is the new 4%).

But here I am, at 55, at 33x, 34x, and still working, because my job is still pretty enjoyable, and 1-2 more years doesn't seem too bad.

2023, the stock market went up like 30%... so even at 50/50 stocks/bonds, I jumped from like 29x to 33x. It snuck up on me too.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
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watchnerd
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Re: 25X 33X 50X 100X ?

Post by watchnerd »

swayswift wrote: Mon May 13, 2024 7:32 pm Why is there always such a big controversy on the SWR as a function of age. Here is my take :
50 -33X
60- 25X
Why the difference in lifespan based on retirement age?

In the above, the retiree at 50 is living to age 83, while the retiree at 60 is living to 85.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
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