I think the ideal solution is a hybrid of the two approaches. Monthly withdrawals into a buffer fund. That way you benefit from averaging your withdraws over the year and benefit from holding a comfortable amount of cash.
this was a great video with sensible rationales. I'm a new viewer, are you still working and investing or are you planning to retire and draw down the investment?
Thank you very much, I really appreciate you watching! I have been 'retired' since 2021. Well, I have been making YT videos and getting involved in rental real estate, but I haven't had a W-2 since 2021. I have been drawing down on investments with a 3% withdrawal rate. Check out this video on my budget for this year: ua-cam.com/video/buZDi0rUl3M/v-deo.html
@@OnCashFlow thanks for the insight! your budget makes sense, 27600 USD is roughly 40000 AUD which is what I want to aim for in the future. 3% withdrawal rate makes sense for 'early retirement', pretty safe estimate. Have you thought about your withdrawal rate changing within a certain band, like withdrawing 2% on low growth years and 4% on higher growth years or are you going to keep it the same at 3% always? Thanks again and excited for future videos!
I probably won't keep 3% forever, It just depends on what happens. I don't have my entire life figured out yet, I might go back to try different work in the future, I might get more serious about real estate investing (3 SFH properties now), or maybe something else. But you can always "Re-Reitre" and run the numbers again when something major changes@@remy7005
Your decision seems pretty reasonable and compatible with your plan. Some would say you're even being a bit more conservative. 🤔 On your last question I'd prefer to cash out the entire year ahead if the market is up (like now) and to cash out monthly amounts if it's down. 🙂
Thanks for saying that. Happy I don't sound too crazy, as many people seem to want to buy when the markets are up but I admit I closed my positions last Nov/Dec and didn't get back in yet (100% fixed income now, not advice, of course). 😬@@OnCashFlow
I’m only semi-retired now, so I don’t need to make withdrawals yet, but my plan when I do is a bit reversed from yours time wise. I’ve switched to having my taxable account dividends and capital gains sent to me instead of being reinvested. I’ll pay taxes on those (since it’s at a lower rate) and use the rest as supplemental income. If I need more, then I’ll probably withdrawal once at a point later in the year when needed. Like you, I don’t like the feeling of withdrawing every month.
What I did deviates DRASTICALLY from what I was planning on doing!
ua-cam.com/video/599vASK-oW0/v-deo.html
I think it sounds like simplicity. A great teacher once taught me not to let perfect be the enemy of good 😊
Haha, sounds like a pretty good teacher, how can I reach out to them? ;)
Will be interesting to see your thoughts end of year on this choive
Yes, I agree! Looking at it in hindsight will be interesante!
I think the ideal solution is a hybrid of the two approaches. Monthly withdrawals into a buffer fund. That way you benefit from averaging your withdraws over the year and benefit from holding a comfortable amount of cash.
Sounds like the bucket strategy haha
My plan is to automatically withdraw quarterly after I retire. My emergency fund should provide a buffer if I hit any unexpected expenses.
Why Quarterly instead of say, monthly or bi-weekly? Just curious.
this was a great video with sensible rationales. I'm a new viewer, are you still working and investing or are you planning to retire and draw down the investment?
Thank you very much, I really appreciate you watching! I have been 'retired' since 2021. Well, I have been making YT videos and getting involved in rental real estate, but I haven't had a W-2 since 2021. I have been drawing down on investments with a 3% withdrawal rate.
Check out this video on my budget for this year:
ua-cam.com/video/buZDi0rUl3M/v-deo.html
@@OnCashFlow thanks for the insight! your budget makes sense, 27600 USD is roughly 40000 AUD which is what I want to aim for in the future.
3% withdrawal rate makes sense for 'early retirement', pretty safe estimate. Have you thought about your withdrawal rate changing within a certain band, like withdrawing 2% on low growth years and 4% on higher growth years or are you going to keep it the same at 3% always? Thanks again and excited for future videos!
I probably won't keep 3% forever, It just depends on what happens. I don't have my entire life figured out yet, I might go back to try different work in the future, I might get more serious about real estate investing (3 SFH properties now), or maybe something else. But you can always "Re-Reitre" and run the numbers again when something major changes@@remy7005
Your decision seems pretty reasonable and compatible with your plan. Some would say you're even being a bit more conservative. 🤔
On your last question I'd prefer to cash out the entire year ahead if the market is up (like now) and to cash out monthly amounts if it's down. 🙂
Right, that makes sense. The market being up probably influenced my decision to try out a 1 time withdrawal!
Thanks for saying that. Happy I don't sound too crazy, as many people seem to want to buy when the markets are up but I admit I closed my positions last Nov/Dec and didn't get back in yet (100% fixed income now, not advice, of course). 😬@@OnCashFlow
In hindsight it may have been best to leave it in as the spy went up considerably this year but still a solid strategy
Yes, exactly, but it was impossible to know. However, not having to calculate and withdraw $$$ every month has so far been great 👍
I’m only semi-retired now, so I don’t need to make withdrawals yet, but my plan when I do is a bit reversed from yours time wise. I’ve switched to having my taxable account dividends and capital gains sent to me instead of being reinvested. I’ll pay taxes on those (since it’s at a lower rate) and use the rest as supplemental income. If I need more, then I’ll probably withdrawal once at a point later in the year when needed. Like you, I don’t like the feeling of withdrawing every month.
Psychology plays a big role in asset withdrawals, especially when you are used to only making contributions!
It also helps that the market is up nicely already year to date!
Haha yup, I'm always getting "lucky" (or maybe I make my own luck?)
@@OnCashFlow no complaints either way!