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Old 12-21-2013, 10:59 AM   #61
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By the end of last month (Nov 2013), my NW was running ahead of inflation by 15.5%. Up 54% in nominal terms.
You've done well in a "crushed W" market. That's the sort of line form you'd see if plotting the SP500 inflation adjusted returns for the last 13 years.
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Old 12-21-2013, 11:13 AM   #62
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Our NW has also increased since ER in 2010 while withdrawing 2 to 4% / year. I've been doing fairly aggressive ROTH conversions and 14% of NW is now in ROTH funds.
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Old 12-21-2013, 11:23 AM   #63
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Don't most calculators and simulations show the portfolio balance growing for awhile, even without record market growth, since the withdrawal rate is usually lower than the real growth rate that most people assume?

If the withdrawal rate is 3-4% but the assumed real return is 4-5% or higher it should go up?

Also I think a lot of people said that if they spent less than their annual withdrawal in a given year and/or the withdrawal was higher than anticipated because of high returns, they withdraw less in following year(s), as opposed to increasing spending.
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Old 12-21-2013, 11:27 AM   #64
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From purely FP/Monte Carlo scenario viewpoint, I would expect to see most FIRE's NW growing now with equity markets at all time highs. IMHO this is no reason to significantly increase spending but rather should be viewed as part of long term fluctuation in portfolio values.
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Old 12-21-2013, 03:23 PM   #65
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Don't most calculators and simulations show the portfolio balance growing for awhile, even without record market growth, since the withdrawal rate is usually lower than the real growth rate that most people assume?

If the withdrawal rate is 3-4% but the assumed real return is 4-5% or higher it should go up?

Also I think a lot of people said that if they spent less than their annual withdrawal in a given year and/or the withdrawal was higher than anticipated because of high returns, they withdraw less in following year(s), as opposed to increasing spending.

Have to include inflation if that's a standard 4% SWR withdrawal. And a little extra if you take the 4% out at the start of the year. For a 4% withdrawal you need 1/.96 = 1.0417 or 4.17% portfolio growth to replace the beginning of the year withdrawal. Then you need to match inflation on top of that, maybe something like 3% on average though we all differ on that. So maybe a 7.17% average growth each year to maintain the real value of your portfolio and keep the withdrawals to a constant percentage of the portfolio as they are increased for inflation. That's approaching the long term average S&P 500 gain, and may match the historical average gains for a portfolio with significant bonds. And then real world volatility of returns totally screws all of that up anyway.
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Old 12-21-2013, 08:00 PM   #66
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BTW for people tracking real returns, here is a handy cumulative inflation calculator. InflationData.com's Cumulative Inflation Calculator

Start with the month prior to your period - for example for inflation since Jan 1, 2000, you start with Dec 1999.
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Old 12-21-2013, 08:02 PM   #67
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You've done well in a "crushed W" market. That's the sort of line form you'd see if plotting the SP500 inflation adjusted returns for the last 13 years.
One day I'll go back and create that graph. Got other things to do first.
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Old 12-21-2013, 08:04 PM   #68
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One day I'll go back and create that graph. Got other things to do first.
I'll be posting a copy of my decades chart at the end of the year. It's basically the orange line + the blue line.
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Old 12-21-2013, 11:26 PM   #69
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Retired 7 years ago at 48, pulling out 3-4% each year as needed, have about 40% more than when I retired in an all-stock portfolio.
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Old 12-22-2013, 08:48 AM   #70
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Retired 7 years ago at 48, pulling out 3-4% each year as needed, have about 40% more than when I retired in an all-stock portfolio.
Very close to my experience over same period. Only cashed dividends which have grown by 75% over this period. Yields have increased quite a lot since I retired, from 2.9% range to 3.75% range.
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Old 12-22-2013, 09:22 AM   #71
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Retired 7 years ago at 48, pulling out 3-4% each year as needed, have about 40% more than when I retired in an all-stock portfolio.
Inflation since end of 2006 - 15.5%, so you are way ahead in real terms too.
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