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"I just unexpectedly retired (I think), but am a little nervous about knowing for sure what I can safely spend each year for living expenses.

I've been told by a few friends that it's safe to allocate 3% of net wealth each year for living expenses. (This assumes a reasonably aggressive investment allocation, yielding 7% performance on average, and a reasonable 3% inflation rate)

It should possibly last for 50 years. And, I won't take SS until age 70, to act as longevity insurance.

How does that compare with your thoughts and budgets? Am I being overly optimistic? "


the figure you will see in most literature is 4% - and then you will
read about many sorts of reasons why that figure is too high or
too low.
As in all things - "go-by's" are general - but your situation is
specific. I was laid off in 2010 - and the first thing I did was
prepare a budget - detailed - calling out what were necessities and
what was discretionary - and worked out what funds I had invested
and where money could come from. Even recognizing that there are
costs involved in converting an investment into cash flow is
something to keep in mind.
Anyway, there are different things to consider other than "safe
withdrawal rate" - one is do you feel comfortable with the
investment mix you have? Do you want to change things? - do you have
others that depend on your income? - Do you want to retire or do you
want to go for an alternate career?

I ended up getting another job in my field - but a lot less money -
8 months into the layoff. And I thought myself lucky. Now, 5
years later, I am looking the possibility of another layoff
in the face - but am in a much better situation.

Anyway - a 3% withdrawal rate is reasonable as a guide.

You may want to bring the question to one of the early
retirement boards -

or the retired Fool board

There are a lot of smart cookies - though the first and the third link do have some political differences. The retirement questions when
raised are handled pretty much the same - only the snark is
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