Why I Disagree With Financial Samurai on This Recommendation

Mr. Enchumbao

I work for a large investment management company helping people save for traditional retirement. During my spare time, I help others save for financial independence and early retirement by writing for Enchumbao. My journey to FI began in 2012. I was in a lot of debt back then, but I turned things around and became debt free a few years later. My wife and I reached financial independence in 2017 and are preparing to retire by 2020.

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4 Responses

  1. $1.4M vs $3.5M, what’s the big difference? 🙂

    Yes, I am under the assumption that we shouldn’t touch principal and should leave some of our wealth to help other people once we are gone. Healthcare costs, medical costs, a downturn in the markets have a great way of making money DISAPPEAR.

    Everybody is lulled into a bull market. I’m preparing for less smooth scenarios.



    • Just a few pennies of a difference. 🙂 I’m assuming that healthcare and medical costs are estimated in the projected expenses when calculating amount needed to retire comfortably.

      A more conservative withdrawal of 3%, described above, barely touches principal. Thanks for stopping by! I enjoyed reading your article, it provides great advice overall.

  2. aperture says:

    Hey Enchumbao – nice succinct review of SWR. It seems like this is a topic that can be endlessly mined for new perspectives because (1) it is all about looking into the crystal ball to predict the future and (2) everyone’s response to the unknowable future is different – some want a really big life raft, while others are happy with water wings and swim lessons. Personally, I am interested in frugality as a means of preserving the planet and financial independence as a means of preserving my own sanity. Thus, I am OK with a 4% SWR knowing that I may need to flexibly respond to adverse sequence of returns. Besides, I do not plan to spend my retirement looking at daytime TV. I look forward to developing my hobbies and one of the greatest acclamations I can experience is having someone pay me for something I made or did for pleasure.
    I have one little rant: It seems like EVERYONE is stating it as a known TRUTH that US equities will have lower returns in the next 30 years than they did in the last 100 years. I agree that it is reasonable to predict this from the high valuations on equities. But so many are prediciting this that I think most have forgotten that the truth is no one knows what will happen next. This is what makes it all so exciting and fun to be alive. Best wishes.

  3. Hi Aperture,
    Yes, if there is one sure thing about the future is its unpredictability and the best we can do is prepared to be flexible with the withdrawal rates in retirement. The assumptions are usually based on a retiree never making another dollar but you’ll be doing it the right way by staying active.
    I stay diversified to lower risk so I’m not too concerned with the lower returns predictions. It’s like the song “Don’t worry, be happy”. Keep saving and investing and the future will take care of itself. Great comment! Thanks for stopping by!

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