SWR recalculation during the retirement

M

Max

Member
In the basic FIRE case, we calculate the SWR with desired parameters, wait for the parameters to come true, and retire according to the SWR calculation.

But what if some parameters change significantly during the retirement?

In principle, the SWR calculation can be redone at any time. The only drawback I can see at the moment is the remaining retirement period getting shorter with time (fixed end date assumed), which makes the calculation less reliable.

What are the pros, cons and pitfalls of an SWR recalculation during the retirement?
 
I would think that changing parameters significantly during retirement is not a great idea.

If you are suddenly in need of spending more and raising your withdrawal rate, you have no means to increase your net worth and you may be in trouble. Changing your portfolio may also make it more difficult.

If you are spending less, it may be fine, but you do not really have to change anything for that.

What parameters do you have in mind?
 
That's kind of the best case scenario :D

If you get more money, you have multiple choices:
  1. You do not nothing and simply assume that your chances have increased
  2. You keep the same withdrawal rate and apply it to the total amount
  3. You increase your withdrawal rate based on the initial portfolio, to take into account the new money.
I don't really have a strategy about what to do in these cases. I would think that in most cases, we should avoid changing strategies, but some cases are unavoidable. And I am not sure there is a best strategy for each case.
 
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