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Early retirement pitches gone wrong
Old 06-25-2007, 09:01 AM   #1
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Early retirement pitches gone wrong

Seems citibank had a little trouble with putting an extra "1" in front of the returns and SWRs...

Early-Retirement Pitches Can Be Too Good - WSJ.com

Suggested that returns in the 12-18% range were reasonable, which would nicely cover the 3% expenses and the 9% SWR.

Interesting that one of the analysts points out the 4% swr but then without any supporting data/evidence suggests that 3% for early retirees is more plausible considering the long time horizon.
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Old 06-25-2007, 12:25 PM   #2
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Originally Posted by cute fuzzy bunny View Post
Interesting that one of the analysts points out the 4% swr but then without any supporting data/evidence suggests that 3% for early retirees is more plausible considering the long time horizon.
Must be the benefit of all his ER experience.

To be fair, Raddr's website has data that suggests the same conclusion. But then we can counter that issue with the effects of international equities & natural resources...
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Old 06-25-2007, 12:54 PM   #3
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Therein lay the problem with monte carlo and reordered sequences. They're simply unnatural and lack the correlative market return.


It sounds simplistic to say "wow, the SWR dropped by 1% and all I did was swap two out of 128 return sequences.".

Well, no. What happened was extending a downtrend by an additional year past where it naturally went. Since a lot of sequences come close to failing, this simply makes additional artificial failures.


The summary says that the exercise is made more reasonable by saying that unexpected things like 9/11 happen. Well...lots of bad an unexpected things DID happen and we have the results.

If someone wants to make a case for future returns being lower than the past, i'm all ears. Playing with data series and producing different results doesnt mean much to me.
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