That is not right in all cases. I ran RIP models before retiring and am confident that my withdrawal rate is solid so we don't change anything when the market hiccups. But our withdrawal rate is about 3% now and will go down to about 2.2% when I start on SS.willthrill81 wrote: ↑Tue Jan 08, 2019 1:58 pmFirst of all, the 'safe withdrawal rate' research assumes that you'll increase your spending every year to keep pace with inflation, regardless of how your portfolio performs. That is not realistic; everyone makes changes to their withdrawals based on portfolio performance. As such, the 'failure' that some have referred to should not be 'run out of money' but much closer to something like 'need to make reductions to our withdrawals'.
Before retiring I put a lot of research into withdrawal strategies and had one I liked but ultimately it is not being used. Reason is, I discovered that (a) our spending is spikey, sometimes way more than the target WR and sometimes way less, so what's the point of an elaborate scheme if you cannot follow it? And (b) we do not spend up to a target WR anyway, we pretty much live within our budget, it's just that the budget has lots of unplanned costs (replacing a car, a new roof, a major house repair, etc.) that occur quite randomly, so while the average is still accurate, the annual variations are significant.
My conclusion to all of this is that if your retirement budget is hovering around the maximum safe WR for your situation, then VWR and other schemes can help. But if you are way under, I am not sure I see the point any more.