Comments on: Retirement Savings Calculator: How Much Do You Need to Retire? How Soon Can You Retire? (Updated for 2023)

By: Andrew

Andrew — Fri, 21 Jul 2017 00:00:21 +0000

Hey Matt – yeah, modifying based on market performance is a widely adopted strategy. And realistically, it’s what I believe most investors will do if the poop hits the fan. As I wrote in the post, if my investment holdings go into the crapper, am I really gonna think, “Well, the experts say I can spend 4 percent, so blow me, Mr. Stock Market!” Nah, I’d tighten my spending, as would most others. You can pull levers like traveling to cheaper vacation destinations, eating out less, etc, to accommodate that temporary withdrawal reduction. As well, if you really have to, you can always do some freelance or consulting work to earn some extra cash on the side to help weather a tough year so that you don’t invade your nest egg too badly: just because you retire doesn’t mean you can’t still earn some money — after all, retirement gives you the time to! (Now, if you want to be able to restart a full-blown career, that’s a different story.)

Finally, as I wrote in the post, market swings impact a portfolio’s longevity far more in the first 10 years (or first third of the retirement period) than in remaining years. So, bottom line: if you can get through the first third of retirement without the market or inflation hammering your portfolio, then your chances of outliving your portfolio go way up. The first third matters the most.

By: Matt Behr

Matt Behr — Thu, 20 Jul 2017 20:37:54 +0000

This makes the assumption of a constant 4% withdrawal rate in retirement.

You can’t control the market when investing into the market, so dollar cost averaging makes sense. However, you have much more control when you take it out.

What do you think would be the effect of modifying based on market performance? For example, adjusting spending down to 3% if the market is down in a year and perhaps up to 5% if the market is strong? This would impact variable retirement costs. Vacation destinations, etc..

It would seem to me to allow you to stay more geared towards equities for long term growth.

I realize that there is a limit to the amount and type of modeling here. But curious if you had any thoughts on the modified strategy?

By: Andrew C.

Andrew C. — Sun, 26 Jun 2016 22:23:45 +0000

In reply to Hawk. Your welcome Hawk!

By: Hawk

Hawk — Sun, 01 May 2016 17:52:10 +0000

I like the spreadsheet. Tried to make one for myself, and got confused with the numbers. This is much better.
I’m one of the lucky ones with a defined benefit pension plan that will pay out 70% of my pre-retirement income annually for life.

I didn’t see a place to put this data on the spreadsheet. A line on the spreadsheet for ‘retirement income’ could cover both side-businesses and defined-benefit retirement plans. I suppose it should be inflation-linked too.

Thanks again for the spreadsheet.