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In FIRECalc, why does CSP provide better result than % of Remaining Portfolio Model?
Old 10-26-2011, 12:35 PM   #1
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In FIRECalc, why does CSP provide better result than % of Remaining Portfolio Model?

In FIRECalc, why do I get a better spending result using the Constant Spending Power Spending Model rather than the Percentage of Remaining Portfolio Spending Model?

I kept all variables in FIRECalc the same. In the Investigate Section, I used the choice- given a success rate, determine a spending level for a set portfolio. I used search for settings that will get a success rate of 95 percent by changing spending level.

When I used the Constant Spending Power Spending Model (in the Spending Models Section), I got $26,944 with a 95 percent success rate.

When I used the Percentage of Remaining Portfolio Model (in the Spending Models Section), I got $24,619 with a 95 percent success rate.

If the Constant Spending Power Spending Model produces a higher annual return with the same success rate as the Percentage of Remaining Portfolio Model, then what would be my motivation to use the Percentage of Remaining Portfolio Model?
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