## The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

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pokebowl
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### The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

Source: https://earlyretirementnow.com/2017/01/ ... case-study
If you’ve been following our series on withdrawal rates you have noticed that we’re quite skeptical about the 4% rule. That would be especially true for early retirees with a much longer horizon than the standard 30 years. Though, by reading through some of the research from the heavy hitters in the retirement research world, even the foundation of the 4% rule over 30 years seems to be crumbling a little bit
Nullius in verba.

AndrewXnn
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

It would seem that the safe rate, whether it be 3%, 4%, 5% or what ever is primarily a function of a person's life expectancy. If they are married, then it's a bit more complicated because it would be the couples life expectancy.

Anyhow, there are tables available on life expectancy which recognize broad categories such as gender and race. There are also some health questions which can be used to refine the results further.

Once a person knows their life expectancy, then if one ignores inflation and returns, it's a relatively simple matter to convert the value to a safe withdrawal rate. 25 years equals 1/25 = 4%. Of course life expediencies are averages, so to be safe what is needed is a 32% probability life expectancy or maybe even a 5% probability life expectancy.
Qualified Nuclear Engineer & NYS Licensed Professional Engineer

patrick013
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

This is a little basic but does get the job done. Say I
have \$1,000,000 saved for retirement and want the money
to last 20 years. The first year I divide by 20 and make
the withdrawal. The second year I take the remaining total
plus any interest or gains and divide by 19 and make the with-
drawal. Continue till the last year. Every year pay some taxes
if applicable.

willthrill81
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

It is becoming quite normal to bash the "4% rule," and many on this forum are advocates of said bashing. However, even this author agrees that in the very rough situation for year 2000 retirees, it's still on track to meet its stated goal, that is, to provide for a fixed 4% (upon retirement) plus CPI income for 30 years.

"In January 2000, you could have withdrawn 4% or more if you weren’t too aggressive on the equity allocation and you’re OK with running out of money after exactly 30 years. 4% probably wasn’t such a bad assumption for regular retirees who were 65 years old in 2000."

The author also fails to mention that retirees in any other year in recent history (i.e. last 25 years) that a retiree using a fixed 4% WR would be in significantly better shape than 2000 retirees, even though the latter are still on track to succeed in the stated aim of the "4% rule."

The author is also apparently overlooking that there's only an 18% chance that at least one of two opposite sex spouses in the U.S. both age 65 (at retirement) will survive to age 95. In fact, it's quite likely that there will be close to a decade when only one spouse will be alive. Such a situation would, in most cases, reduce the need for spending, and much research has found that retirees spend less in real dollars as time goes on, not the same. This trend backtracks somewhat at age 85-90 when medical costs tend to go up, but real dollars spent are still less on average than at age 65. So the likelihood of true failure with a 4% WR is still very low.

The author apparently thinks that the "4% rule" has been widely advocated for early retirees, but I'm not aware of any halfway credible people who state that. For longer periods, many recommend that a "perpetual WR" be used instead, which is designed to ensure that your inflation-adjusted principal is at least the same at the end of the defined period as at the beginning. This is usually 3-3.5%, depending on the portfolio.

And all of that is assuming that a "traditional" portfolio is used, namely one with only stocks and bonds. More recent research indicates that portfolios incorporating other asset classes (i.e. gold, commodities) can smooth out returns enough to easily allow for a 4% perpetual WR or higher.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

avalpert
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

AndrewXnn wrote: Once a person knows their life expectancy, then if one ignores inflation and returns, it's a relatively simple matter to convert the value to a safe withdrawal rate. 25 years equals 1/25 = 4%. Of course life expediencies are averages, so to be safe what is needed is a 32% probability life expectancy or maybe even a 5% probability life expectancy.
But ignoring inflation isn't what a safe withdrawal rate is about - the whole idea is to determine whether you can maintain the same standard of living without depleting the portfolio, that requires inflation adjustments and nominal returns.

DDM4inv79
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

willthrill81 wrote: The author apparently thinks that the "4% rule" has been widely advocated for early retirees, but I'm not aware of any halfway credible people who state that. For longer periods, many recommend that a "perpetual WR" be used instead, which is designed to ensure that your inflation-adjusted principal is at least the same at the end of the defined period as at the beginning. This is usually 3-3.5%, depending on the portfolio.
Then maybe you're not very familiar with the FIRE community: Mr. Money Mustache, Go Curry Cracker, MadFIentist, JL Collins, Millenial Revolution and many, many more all advocate the 4% SWR for early retirees. All quoting the Trinity Study and some quoting the Kitces post on how well the 4% rule did 2000-2016.

AlohaJoe
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

4% probably wasn’t such a bad assumption for regular retirees who were 65 years old in 2000.
Several years ago Wade Pfau published "Will 2000-Era Retirees Experience the Worst Retirement Outcomes in U.S. History? A Progress Report after 10 Years"

At the time Pfau (always the pessimist) said that historical average returns were 4.86% but market fundamentals (like valuations) meant you shouldn't expect even that much...and that with 2% returns likely going forward the 2000-era retiree wasn't in good shape.

Of course, over the next 6 years a 60/40 portfolio had a real return of 8.21% and 2000-era retiree looks fine using the 4% withdrawal rule now.

DDM4inv79
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

AlohaJoe wrote: At the time Pfau (always the pessimist) said that historical average returns were 4.86% but market fundamentals (like valuations) meant you shouldn't expect even that much...and that with 2% returns likely going forward the 2000-era retiree wasn't in good shape.

Of course, over the next 6 years a 60/40 portfolio had a real return of 8.21% and 2000-era retiree looks fine using the 4% withdrawal rule now.
Yes and no. For fresh retirees in 2010, the 4% rule worked fine when the real return was 8.2%. For the unlucky retiree from the year 2000 whose portfolio was depleted to a little over \$500k, the 8% return is just enough to maintain the \$40k a year withdrawal. I think that's what the good old Professor Pfau was after...

willthrill81
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

DDM4inv79 wrote:
willthrill81 wrote: The author apparently thinks that the "4% rule" has been widely advocated for early retirees, but I'm not aware of any halfway credible people who state that. For longer periods, many recommend that a "perpetual WR" be used instead, which is designed to ensure that your inflation-adjusted principal is at least the same at the end of the defined period as at the beginning. This is usually 3-3.5%, depending on the portfolio.
Then maybe you're not very familiar with the FIRE community: Mr. Money Mustache, Go Curry Cracker, MadFIentist, JL Collins, Millenial Revolution and many, many more all advocate the 4% SWR for early retirees. All quoting the Trinity Study and some quoting the Kitces post on how well the 4% rule did 2000-2016.
Mr. Money Mustache seems to imply that a 4% WR is fine for early retirees, though he does mention that the Trinity study was only examining 30 year retirements.

Mad Fientist does not blanket recommend a 4% WR at all.

JL Collins says "4% is only a guide."
http://jlcollinsnh.com/2012/12/07/stock ... nd-anyway/

Millennial Revolution says "And I know, I know, to all the people who are getting outraged right now by the fact that 1 of those 20 people ran out of money, you are free to use 3% as your own personal withdrawal rate, which results in a 100% success rate."
http://www.millennial-revolution.com/in ... is-enough/

Go Curry Cracker says "But to be reasonable, remember the 4% Rule is a Rule of Thumb based on experience, not a Law of Nature. It is the base of a plan."
http://www.gocurrycracker.com/what-is-y ... he-4-rule/

So it doesn't seem to me that the FIRE community is just telling early retirees to use the 4% rule with zero consideration as to why or to alternatives.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

furwut
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

I remain a 4% sceptic. It's not a law of nature.

vitaflo
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

willthrill81 wrote: So it doesn't seem to me that the FIRE community is just telling early retirees to use the 4% rule with zero consideration as to why or to alternatives.
There's always a caveat but it does sometimes read like the 4% rule is "fine" for early retirees on these sites. And frankly, I agree with them. Most people end up with more money than they start with when they follow the rule. Only the very unlucky run out, and all of that is due to sequence of returns.

But an early retiree has something a 65 year old doesn't, time. Sure you can pick the top of the tech bubble as the "worst possible time to retire", but if I'm 40 and have the worst timing ever and retire in 2000 and see my portfolio cut in half in a couple years, it's pretty obvious you picked the wrong time to retire, so back to work you go. If you hadn't retired you would have had to continue to work anyway because of the crash.

But that of course won't happen to most people. They'll be fine.

lazyday
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

4% probably wasn’t such a bad assumption for regular retirees who were 65 years old in 2000.
Several years ago Wade Pfau published "Will 2000-Era Retirees Experience the Worst Retirement Outcomes in U.S. History? A Progress Report after 10 Years"

At the time Pfau (always the pessimist) said that historical average returns were 4.86% but market fundamentals (like valuations) meant you shouldn't expect even that much...and that with 2% returns likely going forward the 2000-era retiree wasn't in good shape.

Of course, over the next 6 years a 60/40 portfolio had a real return of 8.21% and 2000-era retiree looks fine using the 4% withdrawal rule now.
My view on this: If the typical 19xx retiree used a 4% WR and was unlucky, then they died without much money to leave to heirs. If the 2000 retiree used 4% and got unlucky, their portfolio would drop to 0 well before death.

The actual 2000 retiree did not get unlucky.

For a retiree with lots of bonds, today might be a worse time to retire than 2000, when stocks were more expensive but bonds were cheaper.

livesoft
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

The series linked in the OP is another addition to the genre of Sustained Withdrawal Rate articles which many in the "I-wanna-retire-early" community crave to read.

It is fantastic (thoroughly!) in that it references and comments on many of the previously written articles, so that one can just read this series first and not worry too much about what was written before.

And I don't think the series is completed yet, so there is more to come.
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Dandy
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

No one really knows what a safe withdrawal rate is in general or for a specific person/couple. Back tested data may not resemble the future, individual and couple's actual life expectancy is rough guesswork, unexpected expenses often occur in retirement, inflation, interest rates, equity markets, taxes, health, etc. are all large variables.

4% is a reasonable starting point. After that you need to pay attention to your portfolio balance, health, current expenses, etc. and make adjustments to your withdrawal plan that make sense in the present - the earlier the adjustment the softer the impact. Adjustments can go either way. Part of the adjustment decision might be to annuitize a portion of your nest egg to provide some longevity help.

It is understandable that many want to maximize their withdrawals during their early retirement and many will feel cheated if they die and leave money and/or adventures on the table. But, trying to run your withdrawals too robotically based on some formula seems an unnecessary substitute for using some good old common sense-on occasion. So pick a reasonable plan to start with but don't fall in love with it.

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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

willthrill81 wrote: Mr. Money Mustache seems to imply that a 4% WR is fine for early retirees, though he does mention that the Trinity study was only examining 30 year retirements.

Mad Fientist does not blanket recommend a 4% WR at all.

JL Collins says "4% is only a guide."
http://jlcollinsnh.com/2012/12/07/stock ... nd-anyway/

Millennial Revolution says "And I know, I know, to all the people who are getting outraged right now by the fact that 1 of those 20 people ran out of money, you are free to use 3% as your own personal withdrawal rate, which results in a 100% success rate."
http://www.millennial-revolution.com/in ... is-enough/

Go Curry Cracker says "But to be reasonable, remember the 4% Rule is a Rule of Thumb based on experience, not a Law of Nature. It is the base of a plan."
http://www.gocurrycracker.com/what-is-y ... he-4-rule/

So it doesn't seem to me that the FIRE community is just telling early retirees to use the 4% rule with zero consideration as to why or to alternatives.
You with your quotes and references. This was one of the better responses to a provocative blanket statement I've read on here in a while.

DDM4inv79
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

willthrill81 wrote: So it doesn't seem to me that the FIRE community is just telling early retirees to use the 4% rule with zero consideration as to why or to alternatives.
I call all of your examples "hedging" just like most bloggers have disclaimer statements. For each one of those hedges, you get 10 or more wholehearted endorsements of the 4% rule in the FIRE community. Since I don't want to be accused of link spamming I leave it to the neutral observers to check for themselves.
By and large, the 4% rule is the accepted mantra in the early retirement community, with a little bit of hedging & hand-waving here and there. A little bit like the financial version of small-print. The casual reader who's really excited about the 4% will read over those warnings just like they read over the little detail in the Kitces post that the portfolio of the 2000 retiree returned to close \$1,000,000, but only in nominal dollars, not in real terms.

ruralavalon
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

willthrill81 wrote: Mr. Money Mustache seems to imply that a 4% WR is fine for early retirees, though he does mention that the Trinity study was only examining 30 year retirements.

Mad Fientist does not blanket recommend a 4% WR at all.

JL Collins says "4% is only a guide."
http://jlcollinsnh.com/2012/12/07/stock ... nd-anyway/

Millennial Revolution says "And I know, I know, to all the people who are getting outraged right now by the fact that 1 of those 20 people ran out of money, you are free to use 3% as your own personal withdrawal rate, which results in a 100% success rate."
http://www.millennial-revolution.com/in ... is-enough/

Go Curry Cracker says "But to be reasonable, remember the 4% Rule is a Rule of Thumb based on experience, not a Law of Nature. It is the base of a plan."
http://www.gocurrycracker.com/what-is-y ... he-4-rule/

So it doesn't seem to me that the FIRE community is just telling early retirees to use the 4% rule with zero consideration as to why or to alternatives.
You with your quotes and references. This was one of the better responses to a provocative blanket statement I've read on here in a while.
Nice review.

4% is only a starting point, it is not a "rule" at all, it is at most a "rule of thumb" to be adjusted for retirements longer than 30 years, and it is a planning tool rather than a withdrawal formula.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Sheepdog
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

Dandy wrote:No one really knows what a safe withdrawal rate is in general or for a specific person/couple. Back tested data may not resemble the future, individual and couple's actual life expectancy is rough guesswork, unexpected expenses often occur in retirement, inflation, interest rates, equity markets, taxes, health, etc. are all large variables.

4% is a reasonable starting point. After that you need to pay attention to your portfolio balance, health, current expenses, etc. and make adjustments to your withdrawal plan that make sense in the present - the earlier the adjustment the softer the impact. Adjustments can go either way. Part of the adjustment decision might be to annuitize a portion of your nest egg to provide some longevity help.

It is understandable that many want to maximize their withdrawals during their early retirement and many will feel cheated if they die and leave money and/or adventures on the table. But, trying to run your withdrawals too robotically based on some formula seems an unnecessary substitute for using some good old common sense-on occasion. So pick a reasonable plan to start with but don't fall in love with it.
Thank you, Dandy. You said it better than I would. I won't repeat my history in retirement here except to say that real life retirement withdrawals follow no such rule. Let it be a guide. Watch your savings balance. Spend when your balance is up, watch it when your savings are lower. I can tell you that annual expenses don't follow any rules.
Just because it isn't your fault doesn't mean it isn't your responsibility....Josh Reid Jones

ERMD
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

Sheepdog wrote:I won't repeat my history in retirement here except to say that real life retirement withdrawals follow no such rule. Let it be a guide. Watch your savings balance. Spend when your balance is up, watch it when your savings are lower. I can tell you that annual expenses don't follow any rules.
+1. not like i know, or am anywhere close to retirement, but i don't think i'd ever look at my assets and say: zounds! approaching zero dollars! but let's plug away at 4% and hope for the best!
between scotch and nothing, i'll take scotch. -- faulkner

Dutch
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

The 4% rule is like the pirate's code it's more what you'd call "guidelines" than actual rules.

Greg in Idaho
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

DDM4inv79 wrote:
willthrill81 wrote: So it doesn't seem to me that the FIRE community is just telling early retirees to use the 4% rule with zero consideration as to why or to alternatives.
I call all of your examples "hedging" just like most bloggers have disclaimer statements. For each one of those hedges, you get 10 or more wholehearted endorsements of the 4% rule in the FIRE community. Since I don't want to be accused of link spamming I leave it to the neutral observers to check for themselves.
By and large, the 4% rule is the accepted mantra in the early retirement community, with a little bit of hedging & hand-waving here and there. A little bit like the financial version of small-print. The casual reader who's really excited about the 4% will read over those warnings just like they read over the little detail in the Kitces post that the portfolio of the 2000 retiree returned to close \$1,000,000, but only in nominal dollars, not in real terms.
Neutral or not, I checked, and the quotes are often put out as hedges, but if you read on, most of these early retirement guru's have a fairly nuanced view...a number of them say that on the one hand, 4% is SUPER conservative in general, but they think that, in part, because they also think it is necessary (and idiotic not) to pay attention, be flexible, and make adjustments. "Oh the market just crashed and my portfolio just got reduced by 40%...hmmm...perhaps I'll put off that cruise and keep my old car around for a while." Just like you want to account for health issues, heirs/legacy, or anything else that affects your finances. And if you run simulations, you can see what variable spending does to hypothetical success rates, and for times longer than 30yrs.

Chan_va
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

If I am reading the link in the OP correctly, it boils down to

-The 4% rule works for 30 year retirements. For longer time periods, it may not work.
-The real value of your portfolio will go down over time.

Both these I thought are well understood corollaries of the 4% rule. No one ever said that the 4% SWR would last forever, or that your portfolio value would not decrease. What's all the hubhub about?

Dandy
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

-The 4% rule works for 30 year retirements. For longer time periods, it may not work.
Not quite -- better said: the 4% rule HAS WORKED for 30 year retirements. It may not work for you in your retirement

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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

The bigger question is 4% of what?

I couldn't live off 4% of \$250,000... 4% of \$3,000,000... I could make that work.

blueblock
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

Dandy wrote:4% is a reasonable starting point. After that you need to pay attention to your portfolio balance, health, current expenses, etc. and make adjustments to your withdrawal plan that make sense in the present - the earlier the adjustment the softer the impact. Adjustments can go either way.
This is what I do, though you said it better than I could have.

tennisplyr
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

Midsixties and retired 6 years. I have no idea what my withdrawal rate has been, when I need something I buy it. I don't know how long I will live, so I believe tomorrow will take care of itself. As I have said here before, I view life as having many, many good options rather than many insurmountable problems. I am not the first person to come this way, so I have lots of examples on how to survive successfully. Life is good.
Those who move forward with a happy spirit will find that things always work out.

hoops777
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

Anyone who retires and uses a strict 4 pct withdrawal plus inflation with no common sense flexibility and runs out of money will get no sympathy here,and I am normally a very sympathetic person.
K.I.S.S........so easy to say so difficult to do.

NibbanaBanana
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

It's my understanding that the 4% rule is based on a 25%-75% stock allocation. Remainder bonds. And is based on historic bond returns. Now bond yields are at historic lows. Does this change anything? Does it worry anybody but me?

1210sda
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

Agree with the several posters.....the 4% is a "guide", not a "rule". It is primarily for planning during your accumulation period.

But as a guide, I find it to be a pretty good guide. Before I reached the distribution phase in retirement, I used the 4% wr to build a target portfolio balance. I then amortized it over thirty years, giving me a year by year target ending balance in my portfolio. This gave me a bench mark to determine if my actual portfolio was above or below the target for a given year. If i was above, I could spend more if I so desired, If I was below, I would try to hold off on some postponable expenses. As a second safety net, I ran another target portfolio for 40 years using a 3.25% WR. I look at them both in deciding whether to spend more or less for that year(s).

After 15 years of retirement (means I retired in 2001, not a great time to retire), my portfolio balance is considerably above my target for 2016.

1210

Kalo
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

I wonder how most people who retire prior to starting SS withdrawals handle that change. I plan to start SS in about 13 years, but i use a life expectancy of about 34 more years. I generally look at not changing my expenditures once I start taking SS (unless of course things are going so well that I can spend more). It wouldn't make sense to me to live extra frugally until I started taking SS and then live much more extravagantly, as I would be older at that time and also may not even live that long.

So I estimate my ability to withdraw from my portfolio at 4%, knowing that in 13 years I'll start also taking SS. So in that case, the 4% doesn't really need to be all that safe, because once I start taking SS, the burden on my portfolio will be moderated by the SS income. I know that the Firecalc lets you put in your SS, which I have done, and the result on the worst years to retire is that my portfolio goes down for about 13 years, and then starts to recover and never runs out.

Maybe when people generalize about SWR they are just assuming most people don't retire until SS has started and therefore the 4% is in addition to SS for the duration of the retirement?

Kalo
"When people say they have a high risk tolerance, what they really mean is that they are willing to make a lot of money." -- Ben Stein/Phil DeMuth - The Little Book of Bullet Proof Investing.

willthrill81
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

Kalo wrote:I wonder how most people who retire prior to starting SS withdrawals handle that change. I plan to start SS in about 13 years, but i use a life expectancy of about 34 more years. I generally look at not changing my expenditures once I start taking SS (unless of course things are going so well that I can spend more). It wouldn't make sense to me to live extra frugally until I started taking SS and then live much more extravagantly, as I would be older at that time and also may not even live that long.
There are several ways to accommodate it, and there was a recent thread discussing it. One of the simplest ways is to figure out how much your SS payments will be when you start taking them (i.e. \$2k monthly) and how long it will be before they start (i.e. 10 years). You then take that sum (i.e. \$240,000) and place it in a TIPS ladder; the remainder of your needed funds would come from your portfolio and could, theoretically at least, be a fixed amount from early retirement on through receiving SS payouts.

That's not necessarily the most 'efficient' way to do it since you very well might do better investing that \$240k in something that would produce a higher return over the 10 years, but that would likely introduce more volatility than you want to deal with. Also, the above method gives you a virtually guaranteed 'self annuity' with inflation protection, not unlike SS.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

AlohaJoe
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### Re: The Ultimate Guide to Safe Withdrawal Rates: A 2000-2016 case study

NibbanaBanana wrote:It's my understanding that the 4% rule is based on a 25%-75% stock allocation. Remainder bonds. And is based on historic bond returns. Now bond yields are at historic lows. Does this change anything? Does it worry anybody but me?
Real yields are not at historic lows and real returns are the only thing that matters.