Retirement Withdrawal Rates, Ours At Least!

 Retirement Withdrawal Rates, Ours At Least!

It's been a great week - lots of get togethers with other folk to hike, walk, workout, visit cultural centers, and enjoy meals. 

Views from a portion of yesterday's walk - so gorgeous out there after a recent rainstorm passed through.

Plus, we met with one of our financial advisors this week and found them to be unusually positive about the long term prospects of pretty much everything we discussed - inflation, Social Security, tariffs, company earnings, and the financial markets in general.

And, they very directly told me that I was being overly conservative with our portfolio withdrawal rate of 2.5% at this point in our lives (early-60's and 70's). So, OK, I can fix that! Starting in 2026 we will raise it to 2.75%. Woohoo!

Actually, I do know we've been extremely conservative in our portfolio withdrawal rate since retiring, because that is the exact behavior that got us to early retirement in the first place - under spending relative to our income. But, interestingly, we chatted about what is considered the safe withdrawal rate since economists began dropping the Depression of the 1920's from the historic calculations most retirement calculators use. The reason being that the Depression can now be considered an outlier that will never re-occur due to changes since made in governmental regulations and oversite of banking and financial institutions.

The old number, which always seemed frighteningly optimistic to me, was 4%. The new number is 3.2%, which feels a lot more realistic. Thus, even at a new and higher withdrawal rate of 2.75% we will still be well under and conservative - the space where I feel the most comfortable.

In addition, a very large portion of our budget is completely discretionary. Thus, should we ever find need due to a large scale financial calamity of some sort, we can get by on just our pensions and Social Security. Perhaps not in luxury, but the bills would be paid and food purchased.

As a result of feeling optimistic enough to raise our withdrawal rate a bit in 2026, I spent yesterday finishing out our 2026 travel plans. Primarily, I've planned out two four-week just-us trips, two shorter trips/cruises with family, and a nice stay at our annual visit to the international film festival event in Palm Springs.

And we'll go ahead and schedule out a roof replacement, the last remaining update on our list for the house. Once that occurs, the house is pretty much brand new, and should remain trouble free for years and years to come.

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Today's Healthy Focus Plan - Meet girlfriend at art museum followed by lunch, stop at Aldi's on the return trip home for 'usual' items, plus one supermarket for a few of their advertised Loss Leaders, do my Boot Camp 'homework' of planking, squats, push ups and pull ups, read 10 pages of Book Club book, 15 pages of October non fiction book, and then my current pleasure reading book - The Lion Women of Tehran.