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So now I'm 63 and looking at a portfolio worth about 70% of it's value when I retired. And I'm wondering if I need to reapply the 4% rule from scratch. Doing that would cover my normal expenses but leave nothing extra for large purchases like autos. Sticking with 4% of my portfolio in 2000 adjusted for inflation would allow withdrawals of much more than I need. Using 4% of the 12/31/07 value would cover normal expenses plus occasional large purchases like an auto.

From what I understand, you have been taking 4% of the 2000 year value all this time?

I adjust the 4% withdrawals every year to the end of year (12/31) statement. Actually, I don't withdraw 4% for income, but leave some for emergencies and large purchases. When I buy a car, I pay cash, hope for no interest loan and keep the car for at least 7 years before thinking about replacing it. I don't think you can take 4% of an amount you no longer have, so you are right in thinking to adjust withdrawals. And I would do that again 12/31/08, because there might be even less available. That said, I am trying to withdraw a little as possible at this time.

I hope you are right that the market will improve before pundits predict.

Birgit
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