Calculating 4% Withdrawals

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ewood801
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Calculating 4% Withdrawals

Post by ewood801 »

Is there a table or calculator I can use to figure out what my withdrawals should be. If I start in year X what would 4% increased for inflation in year Y.
sailaway
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Re: Calculating 4% Withdrawals

Post by sailaway »

ewood801 wrote: Mon Oct 11, 2021 4:23 pm Is there a table or calculator I can use to figure out what my withdrawals should be. If I start in year X what would 4% increased for inflation in year Y.
That depends on the actual inflation between X and Y, so a static table made today would not be of much use. One thing you could use is an inflation calculator so $40,000 in the year you retire is worth whatever the calculator tells you the day you want to make the next withdrawal.
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Re: Calculating 4% Withdrawals

Post by Grt2bOutdoors »

There's no requirement that you take 4%+ inflation. There is a requirement that you take the RMD as mandated by the IRS, that number is not inflation-adjusted. Here's the IRS worksheet table: https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf
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Re: Calculating 4% Withdrawals

Post by One Ping »

Grt2bOutdoors wrote: Mon Oct 11, 2021 4:30 pm There's no requirement that you take 4%+ inflation. There is a requirement that you take the RMD as mandated by the IRS, that number is not inflation-adjusted. Here's the IRS worksheet table: https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf
FYI - While there is a requirement to 'take' (and pay tax on) your RMD from your tax deferred account(s), there is no requirement to SPEND it.
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Re: Calculating 4% Withdrawals

Post by jebmke »

One Ping wrote: Mon Oct 11, 2021 4:43 pm
Grt2bOutdoors wrote: Mon Oct 11, 2021 4:30 pm There's no requirement that you take 4%+ inflation. There is a requirement that you take the RMD as mandated by the IRS, that number is not inflation-adjusted. Here's the IRS worksheet table: https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf
FYI - While there is a requirement to 'take' (and pay tax on) your RMD from your tax deferred account(s), there is no requirement to SPEND it.
True, but in this context, withdrawal = spending. RMDs are just a transfer from tax-deferred to taxable (or elsewhere) with the government potentially getting their cut.
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Re: Calculating 4% Withdrawals

Post by JoeRetire »

ewood801 wrote: Mon Oct 11, 2021 4:23 pm Is there a table or calculator I can use to figure out what my withdrawals should be. If I start in year X what would 4% increased for inflation in year Y.
Use a calculator.
In year X take out 4% and write down that dollar amount (Z).
In year X+1, determine what inflation has been over the past year.
Multiply Z by that inflation factor and withdraw that amount (Z1).
In year X+2, determine what inflation has been over the past year.
Multiply Z1 by that inflation factor and withdraw that amount (Z2).
Repeat.
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Re: Calculating 4% Withdrawals

Post by NoblesvilleIN »

I calculate 4% plus inflation each January 1st as a sanity check for the next year's actual withdrawals (based on expenses, not 4%) and keep it in a historical spreadsheet. I get the CPI-U numbers from this site: https://inflationdata.com/Inflation/Con ... oaded=true

CPI-U numbers are released around the 15th of each month for the prior month. On the day that I do my calculation (January 1st), the most recent CPI-U number available is for November of the previous year.

On 1/1/2021, I used the following calculation (in a spreadsheet):
Nov. 2020 CPI-U: 260.229
Nov. 2019 CPI-U: 257.208
Difference: 3.021
2020 inflation: 1.17% (calculated as difference divided by prior year's CPI-U or 3.021/257.208)
I then multiply the previous year's SWR amount by 1.0117 to get this year's number.
This sounds more complicated than it really is because I'm using a spreadsheet. I only enter the new CPI-U number for November and copy the formula from the previous year's cell.

Caveat: This method would miss a large increase in inflation that quickly reversed earlier in the year (say May to August). But since I'm only using this number as a sanity check on my actual withdrawals, I'm ok with that. It should average out next year. The poster Longinvest in the VPW thread calculates a 12-month average CPI-U number by summing up the prior 12 months and dividing by 12 and uses that number in his calcuation.
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Re: Calculating 4% Withdrawals

Post by deikel »

Maybe I misunderstand the question

You do NOT adjust the 4% withdrawal for Inflation over time. The inflation is captured in the fact that your principle grows with inflation to compensate the inflation, but you still keep drawing the 4% (of a now bigger principle)

In absolute money taken from your nest egg, the 4% will increase the absolute amount of money over time automaticlaly.

eg the average CAPA is 7%, 4% for withdrawal and 3% for inflation if you like

Other then you talk about different strategies for withdrawals, some of which increase the withdrawal % with time of your retirement passing....
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Re: Calculating 4% Withdrawals

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Re: Calculating 4% Withdrawals

Post by Juice3 »

Here is one measure of inflation.
https://www.minneapolisfed.org/about-us ... ndex-1913-

I am not sure what measure the Trinity study used.

As you see, they have an estimate for 2021, 4.8% that could be used to calculate you 2022 withdrawal as 2021*1.048.
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Re: Calculating 4% Withdrawals

Post by sailaway »

deikel wrote: Tue Oct 12, 2021 8:24 am Maybe I misunderstand the question

You do NOT adjust the 4% withdrawal for Inflation over time. The inflation is captured in the fact that your principle grows with inflation to compensate the inflation, but you still keep drawing the 4% (of a now bigger principle)

In absolute money taken from your nest egg, the 4% will increase the absolute amount of money over time automaticlaly.

eg the average CAPA is 7%, 4% for withdrawal and 3% for inflation if you like

Other then you talk about different strategies for withdrawals, some of which increase the withdrawal % with time of your retirement passing....
This is not the SWR/Trinity study version of 4%. That is precisely 4% of the original portfolio, adjusted for inflation each year.

Also, there is no guarantee that your portfolio will grow every year, certainly not by more than 4%.
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Re: Calculating 4% Withdrawals

Post by 22twain »

NoblesvilleIN wrote: Tue Oct 12, 2021 8:13 am I calculate 4% plus inflation each January 1st as a sanity check for the next year's actual withdrawals (based on expenses, not 4%) and keep it in a historical spreadsheet. I get the CPI-U numbers from this site: https://inflationdata.com/Inflation/Con ... oaded=true
I do something similar, but not on a regular schedule. My actual spending is only about 50-60% of what the "4% rule" would "allow" me based on my portfolio value when I retired nearly five years ago, plus inflation, so it's mainly an intellectual exercise.

One could alternatively use the Social Security COLAs for each year:

https://www.ssa.gov/oact/cola/colaseries.html
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Re: Calculating 4% Withdrawals

Post by skeptical1 »

My goal is to simply withdraw less than the original 4% every year. So far, so good.
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Re: Calculating 4% Withdrawals

Post by JoeRetire »

skeptical1 wrote: Tue Oct 12, 2021 12:50 pm My goal is to simply withdraw less than the original 4% every year.
Why?
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Re: Calculating 4% Withdrawals

Post by skeptical1 »

Haven't needed to yet. That will likely change for the surviving spouse one day. Arguably, I'm frugal to a fault.
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Re: Calculating 4% Withdrawals

Post by indexfundfan »

sailaway wrote: Tue Oct 12, 2021 8:51 am
deikel wrote: Tue Oct 12, 2021 8:24 am Maybe I misunderstand the question

You do NOT adjust the 4% withdrawal for Inflation over time. The inflation is captured in the fact that your principle grows with inflation to compensate the inflation, but you still keep drawing the 4% (of a now bigger principle)

In absolute money taken from your nest egg, the 4% will increase the absolute amount of money over time automaticlaly.

eg the average CAPA is 7%, 4% for withdrawal and 3% for inflation if you like

Other then you talk about different strategies for withdrawals, some of which increase the withdrawal % with time of your retirement passing....
This is not the SWR/Trinity study version of 4%. That is precisely 4% of the original portfolio, adjusted for inflation each year.

Also, there is no guarantee that your portfolio will grow every year, certainly not by more than 4%.
^ This is correct.

Otherwise there is no need for the Trinity study. Theoretically, you will never run out of money if you always withdraw a fixed percentage of the year end portfolio balance.
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Re: Calculating 4% Withdrawals

Post by JoeRetire »

skeptical1 wrote: Tue Oct 12, 2021 7:03 pm Haven't needed to yet. That will likely change for the surviving spouse one day. Arguably, I'm frugal to a fault.
Okay, then withdrawing less than 4% isn't really a "goal". It's just what you happen to be doing at the moment, due to lack of need.

Perhaps your goal is to withdraw no more than you need and/or keep your needs as low as possible.
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Re: Calculating 4% Withdrawals

Post by Ben Mathew »

Withdrawing a fixed $ amount from the portfolio (with or without inflation adjustments) means that withdrawals are not responding to new information about portfolio value and expected growth. Over the course of a retirement, withdrawals done this way will become more and more divorced from the portfolio. If returns are normal or high, withdrawals will become unnecessarily meager relative to portfolio value. If returns are low, withdrawals will prematurely deplete the portfolio.

Consider instead the much more robust strategy of adjusting withdrawals based on portfolio value and expected growth of portfolio:

Amortization based withdrawal (ABW)

Total portfolio allocation and withdrawal (TPAW)
Last edited by Ben Mathew on Thu Oct 14, 2021 10:29 am, edited 1 time in total.
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Re: Calculating 4% Withdrawals

Post by dbr »

Ben Mathew wrote: Thu Oct 14, 2021 10:16 am Withdrawing a fixed $ amount from the portfolio (with or without inflation adjustments) means that withdrawals are not responding to new information about portfolio value and expected growth. Over the course of a retirement, withdrawals done this way will become more and more divorced from the state of the portfolio. If returns are normal or high, withdrawals will be unnecessarily meager relative to portfolio value. If returns are low, withdrawals will prematurely deplete the portfolio.

Consider instead the much more robust strategy of adjusting withdrawals based on portfolio value and expected growth of portfolio:

Amortization based withdrawal (ABW)

Total portfolio allocation and withdrawal (TPAW)
Absolutely. This 4% analysis, as we have to say again and again, is for understanding of what to expect in portfolio behavior and is not a plan for an actual retirement. Real retirements are works constantly in progress. In fact people are going to experience more variation in all sort of life circumstances than they do with their investments -- not different from all other stages of life.

As far as ABW, TPAW, and VPW these are very creative steps in the right direction, but even then might be more rigid than actual reality. In any case how you live your life is not supposed to be dictated by a model. The use of the model is to understand the consequences of what you might do at different points.
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Re: Calculating 4% Withdrawals

Post by Ben Mathew »

dbr wrote: Thu Oct 14, 2021 10:29 am
Ben Mathew wrote: Thu Oct 14, 2021 10:16 am Withdrawing a fixed $ amount from the portfolio (with or without inflation adjustments) means that withdrawals are not responding to new information about portfolio value and expected growth. Over the course of a retirement, withdrawals done this way will become more and more divorced from the state of the portfolio. If returns are normal or high, withdrawals will be unnecessarily meager relative to portfolio value. If returns are low, withdrawals will prematurely deplete the portfolio.

Consider instead the much more robust strategy of adjusting withdrawals based on portfolio value and expected growth of portfolio:

Amortization based withdrawal (ABW)

Total portfolio allocation and withdrawal (TPAW)
Absolutely. This 4% analysis, as we have to say again and again, is for understanding of what to expect in portfolio behavior and is not a plan for an actual retirement. Real retirements are works constantly in progress. In fact people are going to experience more variation in all sort of life circumstances than they do with their investments -- not different from all other stages of life.

As far as ABW, TPAW, and VPW these are very creative steps in the right direction, but even then might be more rigid than actual reality. In any case how you live your life is not supposed to be dictated by a model. The use of the model is to understand the consequences of what you might do at different points.
The way I think of ABW withdrawals is as a guide to how much you can take out this year. You definitely don't have to take out that much. If you take out less, you can rest easy knowing that you're not consuming more than your fair share this year. If you have extra expenses and take out more, then you are being made aware that this level of spending is not sustainable for the future. So just make sure that it's really a needed extra expense that is not expected to recur frequently. If you find yourself taking out more than the ABW amount regularly, then you know you are overconsuming and have to cut spending.

I believe many ABW users think about it this way rather than as a rigid system.
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Re: Calculating 4% Withdrawals

Post by sailaway »

Ben Mathew wrote: Thu Oct 14, 2021 11:11 am
dbr wrote: Thu Oct 14, 2021 10:29 am
Ben Mathew wrote: Thu Oct 14, 2021 10:16 am Withdrawing a fixed $ amount from the portfolio (with or without inflation adjustments) means that withdrawals are not responding to new information about portfolio value and expected growth. Over the course of a retirement, withdrawals done this way will become more and more divorced from the state of the portfolio. If returns are normal or high, withdrawals will be unnecessarily meager relative to portfolio value. If returns are low, withdrawals will prematurely deplete the portfolio.

Consider instead the much more robust strategy of adjusting withdrawals based on portfolio value and expected growth of portfolio:

Amortization based withdrawal (ABW)

Total portfolio allocation and withdrawal (TPAW)
Absolutely. This 4% analysis, as we have to say again and again, is for understanding of what to expect in portfolio behavior and is not a plan for an actual retirement. Real retirements are works constantly in progress. In fact people are going to experience more variation in all sort of life circumstances than they do with their investments -- not different from all other stages of life.

As far as ABW, TPAW, and VPW these are very creative steps in the right direction, but even then might be more rigid than actual reality. In any case how you live your life is not supposed to be dictated by a model. The use of the model is to understand the consequences of what you might do at different points.
The way I think of ABW withdrawals is as a guide to how much you can take out this year. You definitely don't have to take out that much. If you take out less, you can rest easy knowing that you're not consuming more than your fair share this year. If you have extra expenses and take out more, then you are being made aware that this level of spending is not sustainable for the future. So just make sure that it's really a needed extra expense that is not expected to recur frequently. If you find yourself taking out more than the ABW amount regularly, then you know you are overconsuming and have to cut spending.

I believe many ABW users think about it this way rather than as a rigid system.
Many who use a SWR, such as 4%, do the same. We have never seen a report of anyone following any of these methods rigidly. I certainly have no intention of suddenly becoming the kind of person who spends money just because it is there.
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Re: Calculating 4% Withdrawals

Post by Ben Mathew »

sailaway wrote: Thu Oct 14, 2021 11:19 am
Ben Mathew wrote: Thu Oct 14, 2021 11:11 am
dbr wrote: Thu Oct 14, 2021 10:29 am
Ben Mathew wrote: Thu Oct 14, 2021 10:16 am Withdrawing a fixed $ amount from the portfolio (with or without inflation adjustments) means that withdrawals are not responding to new information about portfolio value and expected growth. Over the course of a retirement, withdrawals done this way will become more and more divorced from the state of the portfolio. If returns are normal or high, withdrawals will be unnecessarily meager relative to portfolio value. If returns are low, withdrawals will prematurely deplete the portfolio.

Consider instead the much more robust strategy of adjusting withdrawals based on portfolio value and expected growth of portfolio:

Amortization based withdrawal (ABW)

Total portfolio allocation and withdrawal (TPAW)
Absolutely. This 4% analysis, as we have to say again and again, is for understanding of what to expect in portfolio behavior and is not a plan for an actual retirement. Real retirements are works constantly in progress. In fact people are going to experience more variation in all sort of life circumstances than they do with their investments -- not different from all other stages of life.

As far as ABW, TPAW, and VPW these are very creative steps in the right direction, but even then might be more rigid than actual reality. In any case how you live your life is not supposed to be dictated by a model. The use of the model is to understand the consequences of what you might do at different points.
The way I think of ABW withdrawals is as a guide to how much you can take out this year. You definitely don't have to take out that much. If you take out less, you can rest easy knowing that you're not consuming more than your fair share this year. If you have extra expenses and take out more, then you are being made aware that this level of spending is not sustainable for the future. So just make sure that it's really a needed extra expense that is not expected to recur frequently. If you find yourself taking out more than the ABW amount regularly, then you know you are overconsuming and have to cut spending.

I believe many ABW users think about it this way rather than as a rigid system.
Many who use a SWR, such as 4%, do the same. We have never seen a report of anyone following any of these methods rigidly. I certainly have no intention of suddenly becoming the kind of person who spends money just because it is there.
Sure. The question is whether SWR provides a reasonable guide for how much to take out this year.

Do you recalculate SWR every year or go with the $ figure calculated many years ago at the start of retirement? Both methods are problematic, but in different ways.
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Re: Calculating 4% Withdrawals

Post by randomguy »

Ben Mathew wrote: Thu Oct 14, 2021 11:11 am
The way I think of ABW withdrawals is as a guide to how much you can take out this year. You definitely don't have to take out that much. If you take out less, you can rest easy knowing that you're not consuming more than your fair share this year. If you have extra expenses and take out more, then you are being made aware that this level of spending is not sustainable for the future. So just make sure that it's really a needed extra expense that is not expected to recur frequently. If you find yourself taking out more than the ABW amount regularly, then you know you are overconsuming and have to cut spending.

I believe many ABW users think about it this way rather than as a rigid system.
So when is the 2000 retiree who followed the 4% rule going to run out of money from their overconsumption? In 12 of the first 14 years they spent more than ABW suggested so they are clearly going broke right? So far reality hasn't matched that. They have spend much closer to the right amount of money while the ABW followers have under consumed during their prime retirement years...
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Re: Calculating 4% Withdrawals

Post by Ben Mathew »

randomguy wrote: Thu Oct 14, 2021 12:25 pm
Ben Mathew wrote: Thu Oct 14, 2021 11:11 am
The way I think of ABW withdrawals is as a guide to how much you can take out this year. You definitely don't have to take out that much. If you take out less, you can rest easy knowing that you're not consuming more than your fair share this year. If you have extra expenses and take out more, then you are being made aware that this level of spending is not sustainable for the future. So just make sure that it's really a needed extra expense that is not expected to recur frequently. If you find yourself taking out more than the ABW amount regularly, then you know you are overconsuming and have to cut spending.

I believe many ABW users think about it this way rather than as a rigid system.
So when is the 2000 retiree who followed the 4% rule going to run out of money from their overconsumption? In 12 of the first 14 years they spent more than ABW suggested so they are clearly going broke right? So far reality hasn't matched that. They have spend much closer to the right amount of money while the ABW followers have under consumed during their prime retirement years...
Looking at specific years and seeing if a particular SWR strategy worked out can be misleading. Look instead at whether the SWR provides a reasonable strategy for a variety of potential paths--good returns, bad returns, and normal returns. SWR will be good for a small number of potential paths (constant withdrawals for lower than expected returns) and bad for a large number of potential paths (severe underconsumption for normal to good returns and running out of funds for very low returns.)

ABW tracks the portfolio and will be good for a wide range of outcomes.

If you don't think tracking the portfolio during a market drop is necessary, you're effectively betting that the market will rebound soon enough. If you have that level of confidence, why not time the market and make a leveraged investment in stocks during the downturn? You could do even better than constant withdrawals.
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Re: Calculating 4% Withdrawals

Post by randomguy »

Ben Mathew wrote: Thu Oct 14, 2021 9:37 pm
randomguy wrote: Thu Oct 14, 2021 12:25 pm
Ben Mathew wrote: Thu Oct 14, 2021 11:11 am
The way I think of ABW withdrawals is as a guide to how much you can take out this year. You definitely don't have to take out that much. If you take out less, you can rest easy knowing that you're not consuming more than your fair share this year. If you have extra expenses and take out more, then you are being made aware that this level of spending is not sustainable for the future. So just make sure that it's really a needed extra expense that is not expected to recur frequently. If you find yourself taking out more than the ABW amount regularly, then you know you are overconsuming and have to cut spending.

I believe many ABW users think about it this way rather than as a rigid system.
So when is the 2000 retiree who followed the 4% rule going to run out of money from their overconsumption? In 12 of the first 14 years they spent more than ABW suggested so they are clearly going broke right? So far reality hasn't matched that. They have spend much closer to the right amount of money while the ABW followers have under consumed during their prime retirement years...
Looking at specific years and seeing if a particular SWR strategy worked out can be misleading. Look instead at whether the SWR provides a reasonable strategy for a variety of potential paths--good returns, bad returns, and normal returns. SWR will be good for a small number of potential paths (constant withdrawals for lower than expected returns) and bad for a large number of potential paths (severe underconsumption for normal to good returns and running out of funds for very low returns.)

ABW tracks the portfolio and will be good for a wide range of outcomes.

If you don't think tracking the portfolio during a market drop is necessary, you're effectively saying that you know the market will rebound soon enough. If you have that confidence, why not time the market and make a leveraged investment in stocks during the downturn? You could do even better than constant withdrawals.
It is also informative. Why was ABW so wrong about what the consumption should be for those years? Was this an outlier or does it happen consistantly? When you look at it you find that ABW provides poor results during the only time periods we care about. Spending more in good times isn't an interesting problem. Severe under consuming during poor ones is. And spending tons of money when I am 85+ isn't as appealing as spending money when I am 70.

I don't know enough about leverage to know if you can make money by right within a decade or so that you need. I sort of doubt it. And there is also a vast gap between blindly spending 40k and slashing spending to 30k. Plenty of schemes leave you around 35k......
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Re: Calculating 4% Withdrawals

Post by Ben Mathew »

randomguy wrote: Thu Oct 14, 2021 10:46 pm
Ben Mathew wrote: Thu Oct 14, 2021 9:37 pm
randomguy wrote: Thu Oct 14, 2021 12:25 pm
Ben Mathew wrote: Thu Oct 14, 2021 11:11 am
The way I think of ABW withdrawals is as a guide to how much you can take out this year. You definitely don't have to take out that much. If you take out less, you can rest easy knowing that you're not consuming more than your fair share this year. If you have extra expenses and take out more, then you are being made aware that this level of spending is not sustainable for the future. So just make sure that it's really a needed extra expense that is not expected to recur frequently. If you find yourself taking out more than the ABW amount regularly, then you know you are overconsuming and have to cut spending.

I believe many ABW users think about it this way rather than as a rigid system.
So when is the 2000 retiree who followed the 4% rule going to run out of money from their overconsumption? In 12 of the first 14 years they spent more than ABW suggested so they are clearly going broke right? So far reality hasn't matched that. They have spend much closer to the right amount of money while the ABW followers have under consumed during their prime retirement years...
Looking at specific years and seeing if a particular SWR strategy worked out can be misleading. Look instead at whether the SWR provides a reasonable strategy for a variety of potential paths--good returns, bad returns, and normal returns. SWR will be good for a small number of potential paths (constant withdrawals for lower than expected returns) and bad for a large number of potential paths (severe underconsumption for normal to good returns and running out of funds for very low returns.)

ABW tracks the portfolio and will be good for a wide range of outcomes.

If you don't think tracking the portfolio during a market drop is necessary, you're effectively saying that you know the market will rebound soon enough. If you have that confidence, why not time the market and make a leveraged investment in stocks during the downturn? You could do even better than constant withdrawals.
It is also informative. Why was ABW so wrong about what the consumption should be for those years? Was this an outlier or does it happen consistantly? When you look at it you find that ABW provides poor results during the only time periods we care about. Spending more in good times isn't an interesting problem. Severe under consuming during poor ones is.
ABW was "wrong" about consumption during the downturn because it doesn't have a crystal ball to tell when stocks will recover. That was known only after the fact. So ABW prudently and correctly cut withdrawals to reflect the reduced portfolio. When the market recovered, ABW increased withdrawals to reflect that fact.

ABW conditions on information known to you. If in fact you do expect that stocks will grow faster because of the drop, you would enter that into ABW as a high expected portfolio growth. Then consumption during a downturn doesn't drop as much as the portfolio. This has been covered in multiple posts in the ABW thread. It is also covered in the ABW wiki under "Scenario 2: Expected return increases":
If the market drop was due to a pure valuation change and the underlying earnings of the portfolio are not impacted, then the retiree might expect a higher rate of return going forward.

If expected return is based on an earnings yield model (e.g. 1/CAPE) for stocks and yield to maturity for bonds, a 12.6% reduction in valuation will result in a higher expected real return of .03/(1-.126)=3.43%. With the higher expected return, the withdrawal becomes $41,181. That is a reduction of only 7.4% relative to the original plan of $44,470. A 12.6% reduction in the portfolio led to only a 7.4% reduction in income, because the higher expected return partially offset the loss in portfolio value.

So to the extent that market volatility is caused by valuation changes and gets incorporated into expected returns, withdrawals from the portfolio will be less volatile than the portfolio itself.
As for wanting to spend more in early retirement:
randomguy wrote: Thu Oct 14, 2021 10:46 pm And spending tons of money when I am 85+ isn't as appealing as spending money when I am 70.
Good news. ABW allows you to achieve this by choosing a declining amortization schedule (g<0).

At the end of the day, ABW reflects your current portfolio, your expectations about future growth, and your preferences regarding when to consume. There are also versions that let you schedule extra expenses in any year. Based on all of that, it tells you what you can reasonably withdraw this year. If you are withdrawing more, whether it's because of an SWR strategy or something else, you are taking out too much relative to what your own expectations are. Not other people's expectations. Your own expectations. Because the inputs into ABW are your own expectations.

Also, I am hard pressed to understand why you are so enthusiastic about SWR telling the 2000 retiree, retiring at the peak of the market, to take permanently high constant withdrawals. The same strategy tells the 2003 retiree, retiring just three years later at the bottom of the market, to take permanently low constant withdrawals. Same age, same preferences, same portfolio. But permanently different constant withdrawals due to the timing of when they retired. How could that possibly be right?
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