The whole point of the 4% rule though is to see what happens to the people that retire at the worst possible time. If you are going to say you retire 2-3 years before the worst possible time, you should be talking about the 5% rule:)EnjoyIt wrote: ↑Mon Nov 13, 2017 12:59 pm
That is exactly it. The only way someone gets a raw deal is if they retired at 4% right at the very very peak of the market. If they chose to retire early then they hopefully will be able to find some semi reasonable employment for a few years. If they retired a year or two earlier they would be OK. If they were yet to retire they would likely keep working till they hit their 4% at those market values. Also, as random guy above pointed out, ideally they were not 100% equites and had a reasonable asset allocation and rebalanced through out the run up the previous 5 years. This includes having some percentage in international. A common 50/50-70/30 portfolio with 20-40% international would not be hurting too bad except for that very select few who retired at the tippy top of that peak.
In the end you have to accept the unknown. It is ok to feel fear at that prospects but you can't let it run your life. Fgiure out what prudent hedging is and don't worry about 1% cases too much. When they happen, figure out how to adapt.