A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

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longinvest
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat Mar 21, 2020 9:30 am

Here's a growth chart of the Vanguard LifeStrategy Moderate Growth Fund, which is a low-cost global balanced index One-Fund Portfolio, and of the four markets it invests into as of February 29, 2020 since the start of this forward test:

Image

Here's a comparative chart of the growth of the four markets relative to the Vanguard LifeStrategy Moderate Growth Fund over the same period:

Image
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longinvest
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat Mar 28, 2020 7:07 am

The Bureau of Labor Statistics has published the consumer price index for all urban consumers (CPI-U) for February 2020.

We're interested to calculate an average CPI-U to associate with our forward test at the end of February 2020. Here were the last 12 CPI-U values:

Code: Select all

 Month   CPI-U
03/2019 254.202
04/2019 255.548
05/2019 256.092
06/2019 256.143
07/2019 256.571
08/2019 256.558
09/2019 256.759
10/2019 257.346
11/2019 257.208
12/2019 256.974
01/2020 257.971
02/2020 258.678
We take note that the average CPI-U for the last 12 months at the end of February 2020 was 256.671.

Here were the last 12 CPI-U values as of February 2019 (one year ago):

Code: Select all

 Month   CPI-U
03/2018 249.554
04/2018 250.546
05/2018 251.588
06/2018 251.989
07/2018 252.006
08/2018 252.146
09/2018 252.439
10/2018 252.885
11/2018 252.038
12/2018 251.233
01/2019 251.712
02/2019 252.776
The average CPI-U for the last 12 months at the end of February 2019 was 251.743.

The trailing 1-year average inflation at the end of February 2020 was ((256.671 / 251.743) - 1) = 1.96%.

The chosen Ally savings account has an annual percentage yield (APY) of 1.50%. It's 0.46% below trailing average inflation.
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat Mar 28, 2020 7:11 am

Using average CPI-U calculated in this and previous posts, here's an inflation-adjusted chart of this forward test expressed in February 2019 dollars:

Image
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longinvest
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat Apr 04, 2020 7:31 am

Portfolio balance as of March 31, 2020

The March 2020 return of the Vanguard LifeStrategy Moderate Growth Fund (VSMGX) was -9.27% and the annual percentage yield (APY) of the Ally savings account was 1.50%.

We use account balances as of February 29, 2020 and apply March 2020 growth on investments and interest on savings.
  • Vanguard LifeStrategy Moderate Growth Fund (VSMGX): ($945,369.36 X (1 + -9.27%)) = $857,733.62
  • Withdrawal cushion (at Ally Bank): ($27,052.63 X ((1 + 1.50%)^(1 / 12))) = $27,086.22
Total Portfolio Balance: $884,819.84
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longinvest
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat Apr 04, 2020 7:50 am

Forward test as of March 31, 2020

We continue our forward test. Here's a link to the previous entry.

As of March 31, 2020, the retiree's portfolio is composed of:
  • Vanguard LifeStrategy Moderate Growth Fund (VSMGX): $857,733.62
  • Withdrawal cushion (at Ally Bank): $27,086.22
Total Portfolio Balance: $884,819.84

The retiree has a fixed $1,000 per month pension and is delaying Social Security to age 70 to receive $2,032 per month (in 2020 dollars).

We update the Portfolio Balance cell in the Retirement sheet of the VPW Accumulation And Retirement Worksheet. No other entry needs updating. We get:

Image

The VPW Worksheet suggests to take a $4,901 withdrawal. The retiree withdraws the suggested amount.

After making the withdrawal, the retiree calculates an adjustment using the withdrawal cushion balance:
  • Adjusted withdrawal amount: (($4,901 + $27,086.22) / 6) = $5,331
  • Adjustment: ($5,331 - $4,901) = $430
The retiree transfers $430 out of the Ally savings account and combines it with the $4,901 withdrawal and the $1,000 April 2020 work pension payment for a total retirement income of $6,331 available for taxes and expenses in April 2020.

After withdrawal and transfer, ($857,733.62 - $4,901) = $852,832.62 is left invested into the Vanguard LifeStrategy Moderate Growth Fund and ($27,086.22 - $430) = $26,656.22 is left into the withdrawal cushion for a total portfolio balance of $879,488.84 at the end of March 2020.

The Ally savings account currently carries an annual percentage yield (APY) of 1.50%.

Chart

Here's a chart of total retirement income (blue bars, left axis) and total portfolio balance after withdrawal (red line, right axis). Amounts are displayed as of the morning of the first day of the month.

April 2020 total retirement income is $6,331 and on the morning of April 1, 2020, the total portfolio balance is $879,488.84.

Image

Historical Annual Retirement Income
  • 2019: $76,406 (annualized) -- $38,203 in 6 months, starting retirement in July
  • 2020: $76,743 (annualized) -- $25,581 in 4 months
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat Apr 11, 2020 8:42 am

Here's how the VPW Accumulation And Retirement Worksheet calculated its suggested $4,901 portfolio withdrawal at the end of March 2020.

The retiree will get $2,032/month Social Security payments in 5 years. That's $24,384/year. The percentage for a 5-year withdrawal schedule with a 60/40 stocks/bonds in the VPW Table is 21.5%. As a consequence, ($24,384 / 21.5%) = $113,414 is kept aside (on paper) for Social Security bridge withdrawals.

The $1,000/month work pension isn't indexed to inflation. To dampen the erosion of inflation, only 65.7% of the pension is spent (see this post) and an annual ($1,000 X 12 X (100% - 65.7%)) = $4,116 is invested into the portfolio.

The retiree has a $884,820 portfolio, but $113,414 is kept aside (on paper) for Social Security bridge withdrawals. At age 65 with a 60/40 stocks/bonds portfolio, the percentage in the VPW Table is 5.0%. This results into a (($884,820 - $113,414) X 5.0%) = $38,570 annual VPW withdrawal.

So, on an annual basis the retiree plans to withdraw $24,384 in replacement of future Social Security payments, to invest $4,116 to dampen the ravages of inflation on the fixed work pension, and to take a $38,570 VPW withdrawal. This sums up to ($24,384 - $4,116 + $38,570) = $58,838 and results into a ($58,838 / 12) = $4,903 portfolio withdrawal. The small $2 difference with the VPW Worksheet's suggested amount is due to rounding.

Note that Total Retirement Income also includes the monthly $1,000 work pension payment for a total of ($58,838 + (12 X $1,000)) = $70,838/year ($5,903/month) available for taxes and expenses.

The VPW worksheet also calculates a Required Flexibility that must be maintained by the retiree. To do so, it first applies a -50% loss to the stocks allocation and then repeats its calculations. With 60/40 stocks/bonds allocation, this results into a (-50% X 60%) = -30% portfolio loss. That's a (-30% X $884,820) = -$265,446 portfolio loss, reducing the portfolio to ($884,820 - $265,446) = $619,374 after the loss. This implies a (($24,384 - $4,116 + (($619,374 - $113,414) X 5.0%)) / 12) = $3,797 monthly portfolio withdrawal which represents a ($3,797 - $4,903) = -$1,106 reduction after the loss.

The retiree must maintain the flexibility to easily cut spending by up to -$1,106/month because stocks could easily lose -50% of their value within a short time period. In other words, at least $1,106 must be budgeted for optional discretionary spending that could be eliminated without affecting the retiree's comfort.
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longinvest
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat Apr 18, 2020 7:41 am

The portfolio of the retiree is entirely invested into the Vanguard LifeStrategy Moderate Growth Fund (VSMGX), an automatically-rebalanced low-cost global balanced index One-Fund Portfolio with a 60/40 stock/bond allocation spread across 3,535 US stocks, 7,521 international stocks, 9,237 US bonds. and 6,173 international bonds for a total of 26,466 global securities.

Here's a growth chart of the Vanguard LifeStrategy Moderate Growth Fund and of the four markets it invests into since the start of this forward test until March 31, 2020:

Image

Here's a comparative chart of the growth of the four markets relative to the Vanguard LifeStrategy Moderate Growth Fund over the same period:

Image
Bogleheads investment philosophy | One-ETF global balanced index portfolio | VPW

Topic Author
longinvest
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat Apr 25, 2020 8:30 am

The Bureau of Labor Statistics has published the consumer price index for all urban consumers (CPI-U) for March 2020.

We're interested to calculate an average CPI-U to associate with our forward test at the end of March 2020. Here were the last 12 CPI-U values:

Code: Select all

 Month   CPI-U
04/2019 255.548
05/2019 256.092
06/2019 256.143
07/2019 256.571
08/2019 256.558
09/2019 256.759
10/2019 257.346
11/2019 257.208
12/2019 256.974
01/2020 257.971
02/2020 258.678
03/2020 258.115
We take note that the average CPI-U for the last 12 months at the end of March 2020 was 256.997.

Here were the last 12 CPI-U values as of March 2019 (one year ago):

Code: Select all

 Month   CPI-U
04/2018 250.546
05/2018 251.588
06/2018 251.989
07/2018 252.006
08/2018 252.146
09/2018 252.439
10/2018 252.885
11/2018 252.038
12/2018 251.233
01/2019 251.712
02/2019 252.776
03/2019 254.202
The average CPI-U for the last 12 months at the end of March 2019 was 252.130.

The trailing 1-year average inflation at the end of March 2020 was ((256.997 / 252.130) - 1) = 1.93%.

The chosen Ally savings account has an annual percentage yield (APY) of 1.50%. It's 0.43% below trailing average inflation.
Last edited by longinvest on Sat May 23, 2020 6:38 am, edited 1 time in total.
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longinvest
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat Apr 25, 2020 8:30 am

Using average CPI-U calculated in this and previous posts, here's an inflation-adjusted chart of this forward test expressed in March 2019 dollars:

Image
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Topic Author
longinvest
Posts: 4247
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat May 02, 2020 9:32 am

Portfolio balance as of April 30, 2020

The April 2020 return of the Vanguard LifeStrategy Moderate Growth Fund (VSMGX) was 7.32% and the annual percentage yield (APY) of the Ally savings account was 1.50%.

We use account balances as of March 31, 2020 and apply April 2020 growth on investments and interest on savings.
  • Vanguard LifeStrategy Moderate Growth Fund (VSMGX): ($852,832.62 X (1 + 7.32%)) = $915,259.97
  • Withdrawal cushion (at Ally Bank): ($26,656.22 X ((1 + 1.50%)^(1 / 12))) = $26,689.31
Total Portfolio Balance: $941,949.28
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longinvest
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat May 02, 2020 9:46 am

Forward test as of April 30, 2020

We continue our forward test. Here's a link to the previous entry.

As of April 30, 2020, the retiree's portfolio is composed of:
  • Vanguard LifeStrategy Moderate Growth Fund (VSMGX): $915,259.97
  • Withdrawal cushion (at Ally Bank): $26,689.31
Total Portfolio Balance: $941,949.28

The retiree has a fixed $1,000 per month pension and is delaying Social Security to age 70 to receive $2,032 per month (in 2020 dollars).

We update the Portfolio Balance cell in the Retirement sheet of the VPW Accumulation And Retirement Worksheet. No other entry needs updating. We get:

Image

The VPW Worksheet suggests to take a $5,139 withdrawal. The retiree withdraws the suggested amount.

After making the withdrawal, the retiree calculates an adjustment using the withdrawal cushion balance:
  • Adjusted withdrawal amount: (($5,139 + $26,689.31) / 6) = $5,305
  • Adjustment: ($5,305 - $5,139) = $166
The retiree transfers $166 out of the Ally savings account and combines it with the $5,139 withdrawal and the $1,000 May 2020 work pension payment for a total retirement income of $6,305 available for taxes and expenses in May 2020.

After withdrawal and transfer, ($915,259.97 - $5,139) = $910,120.97 is left invested into the Vanguard LifeStrategy Moderate Growth Fund and ($26,689.31 - $166) = $26,523.31 is left into the withdrawal cushion for a total portfolio balance of $936,644.28 at the end of April 2020.

The Ally savings account currently carries an annual percentage yield (APY) of 1.50%.

Chart

Here's a chart of total retirement income (blue bars, left axis) and total portfolio balance after withdrawal (red line, right axis). Amounts are displayed as of the morning of the first day of the month.

May 2020 total retirement income is $6,305 and on the morning of May 1, 2020, the total portfolio balance is $936,644.28.

Image

Historical Annual Retirement Income
  • 2019: $76,406 (annualized) -- $38,203 in 6 months, starting retirement in July
  • 2020: $76,526 (annualized) -- $31,886 in 5 months
Bogleheads investment philosophy | One-ETF global balanced index portfolio | VPW

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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat May 09, 2020 7:09 am

Here's how the VPW Accumulation And Retirement Worksheet calculated its suggested $5,139 portfolio withdrawal at the end of April 2020.

The retiree will get $2,032/month Social Security payments in 5 years. That's $24,384/year. The percentage for a 5-year withdrawal schedule with a 60/40 stocks/bonds in the VPW Table is 21.5%. As a consequence, ($24,384 / 21.5%) = $113,414 is kept aside (on paper) for Social Security bridge withdrawals.

The $1,000/month work pension isn't indexed to inflation. To dampen the erosion of inflation, only 65.7% of the pension is spent (see this post) and an annual ($1,000 X 12 X (100% - 65.7%)) = $4,116 is invested into the portfolio.

The retiree has a $941,949 portfolio, but $113,414 is kept aside (on paper) for Social Security bridge withdrawals. At age 65 with a 60/40 stocks/bonds portfolio, the percentage in the VPW Table is 5.0%. This results into a (($941,949 - $113,414) X 5.0%) = $41,427 annual VPW withdrawal.

So, on an annual basis the retiree plans to withdraw $24,384 in replacement of future Social Security payments, to invest $4,116 to dampen the ravages of inflation on the fixed work pension, and to take a $41,427 VPW withdrawal. This sums up to ($24,384 - $4,116 + $41,427) = $61,695 and results into a ($61,695 / 12) = $5,141 portfolio withdrawal. The small $2 difference with the VPW Worksheet's suggested amount is due to rounding.

Note that Total Retirement Income also includes the monthly $1,000 work pension payment for a total of ($61,695 + (12 X $1,000)) = $73,695/year ($6,141/month) available for taxes and expenses.

The VPW worksheet also calculates a Required Flexibility that must be maintained by the retiree. To do so, it first applies a -50% loss to the stocks allocation and then repeats its calculations. With 60/40 stocks/bonds allocation, this results into a (-50% X 60%) = -30% portfolio loss. That's a (-30% X $941,949) = -$282,585 portfolio loss, reducing the portfolio to ($941,949 - $282,585) = $659,364 after the loss. This implies a (($24,384 - $4,116 + (($659,364 - $113,414) X 5.0%)) / 12) = $3,964 monthly portfolio withdrawal which represents a ($3,964 - $5,141) = -$1,177 reduction after the loss.

The retiree must maintain the flexibility to easily cut spending by up to -$1,177/month because stocks could easily lose -50% of their value within a short time period. In other words, at least $1,177 must be budgeted for optional discretionary spending that could be eliminated without affecting the retiree's comfort.
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Mon May 11, 2020 10:06 pm

Reported on another thread:
tennisplyr wrote:
Mon May 11, 2020 5:58 pm
Got an email from Ally Bank today saying they are lowering their interest rate to 1.25% from 1.5% on savings accounts.
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longinvest
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat May 16, 2020 9:40 am

The portfolio of the retiree is entirely invested into the Vanguard LifeStrategy Moderate Growth Fund (VSMGX), an automatically-rebalanced low-cost global balanced index One-Fund Portfolio with a 60/40 stock/bond allocation which, as of April 30, 2020, is spread across 3,513 US stocks, 7,468 international stocks, 9,398 US bonds, and 6,175 international bonds for a total of 26,554 global securities.

Here's a growth chart of the Vanguard LifeStrategy Moderate Growth Fund and of the four markets it invests into since the start of this forward test until April 30, 2020:

Image

Here's a comparative chart of the growth of the four markets relative to the Vanguard LifeStrategy Moderate Growth Fund over the same period:

Image
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JamesJonesJrJr
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by JamesJonesJrJr » Sat May 16, 2020 11:23 am

Sorry if this is a stupid question, but how does VPW account for inflation? The growth trend assumptions indicate 5% growth trend for stocks and 1.9% for bonds. Are these 'real', post-inflation returns or nominal returns?

Topic Author
longinvest
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat May 16, 2020 12:25 pm

JamesJonesJrJr wrote:
Sat May 16, 2020 11:23 am
Sorry if this is a stupid question, but how does VPW account for inflation? The growth trend assumptions indicate 5% growth trend for stocks and 1.9% for bonds. Are these 'real', post-inflation returns or nominal returns?
JamesJonesJrJr, as your question is related to the VPW method (not to this forward test), I've replied to it in this post of the VPW thread.
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Topic Author
longinvest
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat May 23, 2020 6:43 am

The Bureau of Labor Statistics has published the consumer price index for all urban consumers (CPI-U) for April 2020.

We're interested to calculate an average CPI-U to associate with our forward test at the end of April 2020. Here were the last 12 CPI-U values:

Code: Select all

 Month   CPI-U
05/2019 256.092
06/2019 256.143
07/2019 256.571
08/2019 256.558
09/2019 256.759
10/2019 257.346
11/2019 257.208
12/2019 256.974
01/2020 257.971
02/2020 258.678
03/2020 258.115
04/2020 256.389
We take note that the average CPI-U for the last 12 months at the end of April 2020 was 257.067.

Here were the last 12 CPI-U values as of April 2019 (one year ago):

Code: Select all

 Month   CPI-U
05/2018 251.588
06/2018 251.989
07/2018 252.006
08/2018 252.146
09/2018 252.439
10/2018 252.885
11/2018 252.038
12/2018 251.233
01/2019 251.712
02/2019 252.776
03/2019 254.202
04/2019 255.548
The average CPI-U for the last 12 months at the end of April 2019 was 252.547.

The trailing 1-year average inflation at the end of April 2020 was ((257.067 / 252.547) - 1) = 1.79%.

The chosen Ally savings account has an annual percentage yield (APY) of 1.25%. It's 0.54% below trailing average inflation.
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hoops777
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by hoops777 » Sat May 23, 2020 12:45 pm

Simple?
Simple is SS plus your RMD if the amounts work for expenses. Excess RMD’s reinvested for a rainy day or whatever you want.
K.I.S.S........so easy to say so difficult to do.

Investor9904678
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by Investor9904678 » Sat May 23, 2020 2:48 pm

hoops777 wrote:
Sat May 23, 2020 12:45 pm
Simple?
Simple is SS plus your RMD if the amounts work for expenses. Excess RMD’s reinvested for a rainy day or whatever you want.
The retiree will get $2,032/month Social Security payments in 5 years. That's $24,384/year. The percentage for a 5-year withdrawal schedule with a 60/40 stocks/bonds in the VPW Table is 21.5%. As a consequence, ($24,384 / 21.5%) = $113,414 is kept aside (on paper) for Social Security bridge withdrawals.

The $1,000/month work pension isn't indexed to inflation. To dampen the erosion of inflation, only 65.7% of the pension is spent (see this post) and an annual ($1,000 X 12 X (100% - 65.7%)) = $4,116 is invested into the portfolio.

The retiree has a $941,949 portfolio, but $113,414 is kept aside (on paper) for Social Security bridge withdrawals. At age 65 with a 60/40 stocks/bonds portfolio, the percentage in the VPW Table is 5.0%. This results into a (($941,949 - $113,414) X 5.0%) = $41,427 annual VPW withdrawal.

So, on an annual basis the retiree plans to withdraw $24,384 in replacement of future Social Security payments, to invest $4,116 to dampen the ravages of inflation on the fixed work pension, and to take a $41,427 VPW withdrawal. This sums up to ($24,384 - $4,116 + $41,427) = $61,695 and results into a ($61,695 / 12) = $5,141 portfolio withdrawal. The small $2 difference with the VPW Worksheet's suggested amount is due to rounding.
As stated very clearly in the bold and underlined sections above, this test begins for someone before SS and RMDs begin. So I fail to see how your "simple" plan helps in the situation actually under discussion here.

hoops777
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by hoops777 » Sat May 23, 2020 4:00 pm

Investor9904678 wrote:
Sat May 23, 2020 2:48 pm
hoops777 wrote:
Sat May 23, 2020 12:45 pm
Simple?
Simple is SS plus your RMD if the amounts work for expenses. Excess RMD’s reinvested for a rainy day or whatever you want.
The retiree will get $2,032/month Social Security payments in 5 years. That's $24,384/year. The percentage for a 5-year withdrawal schedule with a 60/40 stocks/bonds in the VPW Table is 21.5%. As a consequence, ($24,384 / 21.5%) = $113,414 is kept aside (on paper) for Social Security bridge withdrawals.

The $1,000/month work pension isn't indexed to inflation. To dampen the erosion of inflation, only 65.7% of the pension is spent (see this post) and an annual ($1,000 X 12 X (100% - 65.7%)) = $4,116 is invested into the portfolio.

The retiree has a $941,949 portfolio, but $113,414 is kept aside (on paper) for Social Security bridge withdrawals. At age 65 with a 60/40 stocks/bonds portfolio, the percentage in the VPW Table is 5.0%. This results into a (($941,949 - $113,414) X 5.0%) = $41,427 annual VPW withdrawal.

So, on an annual basis the retiree plans to withdraw $24,384 in replacement of future Social Security payments, to invest $4,116 to dampen the ravages of inflation on the fixed work pension, and to take a $41,427 VPW withdrawal. This sums up to ($24,384 - $4,116 + $41,427) = $61,695 and results into a ($61,695 / 12) = $5,141 portfolio withdrawal. The small $2 difference with the VPW Worksheet's suggested amount is due to rounding.
As stated very clearly in the bold and underlined sections above, this test begins for someone before SS and RMDs begin. So I fail to see how your "simple" plan helps in the situation actually under discussion here.
Well excuse me for skimming,but life does go on ,right? No harm,no foul.
One thing I do know is what “simple” actually is. TakIng the word simple out of the title would be a much better description in my simple opinion.
K.I.S.S........so easy to say so difficult to do.

Investor9904678
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by Investor9904678 » Sat May 23, 2020 5:28 pm

hoops777 wrote:
Sat May 23, 2020 4:00 pm
Well excuse me for skimming,but life does go on ,right? No harm,no foul.
One thing I do know is what “simple” actually is. TakIng the word simple out of the title would be a much better description in my simple opinion.
Fair enough and to each his own. In my opinion, updating one cell in a spreadsheet and then completing two calculations qualifies as simple, but certainly the word is subjective and you differ in your view of these three steps. However, your definition of "simple" still does not apply here since the retiree does not have SS or RMDs yet, so that method would not be simple; it would be impossible.

Perhaps the detail that longinvest provides is off-putting to some, but he is merely explaining thoroughly how the VPW spreadsheet calculates its withdrawals, which I appreciate.

Of course, the beauty of the forum is that we are never forced to read anything we do not want to.

hoops777
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Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by hoops777 » Sat May 23, 2020 6:19 pm

Investor9904678 wrote:
Sat May 23, 2020 5:28 pm
hoops777 wrote:
Sat May 23, 2020 4:00 pm
Well excuse me for skimming,but life does go on ,right? No harm,no foul.
One thing I do know is what “simple” actually is. TakIng the word simple out of the title would be a much better description in my simple opinion.
Fair enough and to each his own. In my opinion, updating one cell in a spreadsheet and then completing two calculations qualifies as simple, but certainly the word is subjective and you differ in your view of these three steps. However, your definition of "simple" still does not apply here since the retiree does not have SS or RMDs yet, so that method would not be simple; it would be impossible.

Perhaps the detail that longinvest provides is off-putting to some, but he is merely explaining thoroughly how the VPW spreadsheet calculates its withdrawals, which I appreciate.

Of course, the beauty of the forum is that we are never forced to read anything we do not want to.
Very true.It is simple for people with the knowledge and experience.Making a free throw is simple for me but almost impossible for a person with no basketball experience. So as you said to each their own.
Food for thought. I am 68.I have a college degree.I owned a small business for 23 years with 5 employees and I did all the sales,accounting,appointments,etc. I also was a high school basketball coach for 25 years. I have never used a spread sheet in my life and did all my accounting by hand in a journal.It was actually quite simple. :D
K.I.S.S........so easy to say so difficult to do.

nanameg
Posts: 182
Joined: Fri Mar 20, 2020 10:57 am

Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by nanameg » Sat May 23, 2020 8:23 pm

hoops777 wrote:
Sat May 23, 2020 6:19 pm
Investor9904678 wrote:
Sat May 23, 2020 5:28 pm
hoops777 wrote:
Sat May 23, 2020 4:00 pm
Well excuse me for skimming,but life does go on ,right? No harm,no foul.
One thing I do know is what “simple” actually is. TakIng the word simple out of the title would be a much better description in my simple opinion.
Fair enough and to each his own. In my opinion, updating one cell in a spreadsheet and then completing two calculations qualifies as simple, but certainly the word is subjective and you differ in your view of these three steps. However, your definition of "simple" still does not apply here since the retiree does not have SS or RMDs yet, so that method would not be simple; it would be impossible.

Perhaps the detail that longinvest provides is off-putting to some, but he is merely explaining thoroughly how the VPW spreadsheet calculates its withdrawals, which I appreciate.

Of course, the beauty of the forum is that we are never forced to read anything we do not want to.
Very true.It is simple for people with the knowledge and experience.Making a free throw is simple for me but almost impossible for a person with no basketball experience. So as you said to each their own.
Food for thought. I am 68.I have a college degree.I owned a small business for 23 years with 5 employees and I did all the sales,accounting,appointments,etc. I also was a high school basketball coach for 25 years. I have never used a spread sheet in my life and did all my accounting by hand in a journal.It was actually quite simple. :D
Thank you hoops 777. I am 64,a retired physician, raised three daughters, helping to care for 5 grandchildren and I too have done all my investing accounting manually in notebooks...it’s good to hear that others invest successfully without spreadsheets, graphs etc. it can be done! We all have different skills and experience and it seems different definitions of simple.

Topic Author
longinvest
Posts: 4247
Joined: Sat Aug 11, 2012 8:44 am

Re: A Simple Bogleheads Retirement Using Variable Percentage Withdrawals (VPW Forward Test)

Post by longinvest » Sat May 30, 2020 7:32 am

Using average CPI-U calculated in this and previous posts, here's an inflation-adjusted chart of this forward test expressed in April 2020 dollars:

Image
Bogleheads investment philosophy | One-ETF global balanced index portfolio | VPW

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