If I fire right now, how much should I try to live on? Should I re-evaluate SWR every year? NW $3M Age 42 No property (75% invested in VTI)
Dividends alone would be ~$50k a year depending on what your other 25% is invested in. 100k would be doable for sure but consider sequence of returns risk and withdraw less when markets are down
5% risk free is $150K assuming its not in 401K or IRA. That should be the minimum you are getting without touching principal.
In order to withdraw that amount in a risk free asset, the principal will not be growing and you need it to grow to keep up with inflation.
If you are single, $3M is plenty and at some point he/she/them will need to draw down the principal. My advice is to spend down your money for next 30 years and go live somewhere cheaper or get on govt assistance. By then it will all be a needs based system. Social security , etc. regardless of how much u paid in. There wont be these high paying IT jobs, as most will get offshored . Spend now and dont worry about later. The USA has got your back. 🇺🇸🇺🇸🇺🇸🇺🇸
3.3% seems about right
The best source I found on this is 3.3%, after going through the large amount of content at earlyretirementnow.com It's important to factor in that this assumes a good strategy for having the right mix of appreciation and risk reduction. He goes through all of this in depth and has a great calculator for you to customize it all in Google sheets
Thanks, a lot of blinders say 3% but that just seems overly conservative (provided the right investment strategy). One thing I’ve been researching is a strategy to dynamically adjust the withdrawal number, annually or whatever. Taking a SWR number arbitrarily at a single point in time and just sticking to it seems a bit off.
What’s your family situation? Married or single? Kids?
How much is your overhead? If you don’t know then figure that out first.
Spend $5-$10k to get fee only financial advisor for this type of decision (NAPFA). Blind is fine for many questions, planning FIRE is hugely personal and a big deal.
Between 75-90