I am not looking at the withdrawal rate. I am looking at the safety of the assets underlying one's retirement. If the OP could create a 50-year TIPS ladder paying him $75k/year he would have a safe retirement. If the OP purchased an SPIA paying him $75k with generous inflation adjustments, he would have a safe retirement.TN_Boy wrote: ↑Tue Apr 17, 2018 9:24 pmOkay, so you believe a 2.5% withdrawal rate over 50 years is not safe enough. I don't know that I agree but wanted to make sure I understood. Would 2.5% be safe for 30 years? 40 years? Would 1% be safe for 50 years? You sort of bypassed my question, by arguing for creating a "safe" income floor (which I don't necessarily disagree with, I just wanted to get back to what is a reasonable withdrawal).VictoriaF wrote: ↑Tue Apr 17, 2018 4:56 pmThe unsafe part is not the 2.5% withdrawal rate but the 50/50 portfolio stipulated by the OP. He might fund his retirement with a mix of TIPS and annuities and keep the leftovers in the stock market.TN_Boy wrote: ↑Tue Apr 17, 2018 8:20 amIt's very reassuring to have SS and/or a good pension for part of retirement expenses, but do you really think a 2.5% withdrawal rate is unsafe, even for a long retirement? If so, why do you think that?
Is it the duration or the withdrawal rate you don't like?
How much would you put in TIPs? Without bothering to check, I"m pretty sure trying to buy SPIAs at age 40 wouldn't work well. So the "safe" money would have to be TIPs, I think.
SWR is a heuristic for getting a ballpark figure for how much you need to retire. SWR is not a good heuristic for assuming that you will have a financialy secure retirement. Stocks are not safe. No amount of the past history will make them safe. No amount of academic papers will make them safe. When you pull the plug and retire for good, you need safe money to carry you for your planned length of retirement. And you better plan for a longer retirement than your statistical life expectancy.