Subject: Re: Dividends
I didn't know then about that simple "4% SWR" rule, but think it's far more suitable for most retirees than whatever sophisticated scheme this board comes up with, actually think it's brilliant to have such a simple rule of thumb!

I am surprised that at least so far in this thread, no one has mentioned the idea of just taking "RMDs" as a strategy.

Traditional IRAs and 401ks have a schedule of payouts called "RMDs" or Required Minimum Distributions. The RMD for each year is very simply based on how many more years you are expected to live. If you are expected to live 25 more years, your RMD is 4% or 1/25 of your account. As you age, and your expected remaining life drops, your payout ratio increases. As your expected remaining life drops from 20, to 16.7, then 14, then 12.5,... 11,.. 10 more years or life, your RMD rises to 5%, 6%, 7%, 8%, 9%, then 10%.

By comparison to the 4% SWR, just taking the RMD each year is NOT trying to be a steady income, particularly. RMD's go up as you make more money in an account, and go down, eventually, as you get older and are taking more out than the account earns. But an RMD does never go to zero, although when you are 120 years old and older, the RMD settles down to 50% per year, which means with relatively low income in the account, you are more or less getting 1/2 the income each year than the year before.

SO I can see people are looking for steadiness as a proxy for how much income you want. I tend to think I'll want more income when I am younger retiree than older, but of course that is backwards if I require $5000/month of assistance if I can't walk and can't transfer myself in and out of a wheelchair.

ANyway, I was interested if anybody saw anything interesting in comparing the IRA RMD "strategy" to the 4% SWR and other strategies discussed here.

R:)