

03302004, 07:04 PM

#101

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Location: Losing my whump
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Re: Self Correction
Quote:
I disagree that it's necessarily equally risky, so I can still argue it's not exactly the same thing, and I can argue that FIREcalc doesn't say 6% in 2004 is 100% safe. : (Although I think I've exhausted all ways of saying it.)

Sort of. In 2000 we still thought it might be "all different" and it wasnt clear what the impending risk might be. Sort of like riding a dirt bike full tilt on a big flat open space towards an invisible precipice. The perceived risk might have been lower before you went 3 miles down the face of the precipice. But the point is right on. 4% in 2000 is no more or less likely to work than 6% in 2004. Although I'd feel less good about the 6% than the 4% because I know there be precipices nearby...but I might feel better about 4% in 2004 than I did in 2000 with the same sized portfolios.
As far as two sequential slumps? Oh yes.
From July of 1929 to June of 1932, the Dow fell from 380 to 42. From then to August it ran up to 78. Then from August to February of 1933 it fell back to 53. A huge drop, rise and drop, percentagewise. Substantial drops in 1937, 1938, and 1940 and 1942 after run ups. In fact there are a number of large percentage up and down cycles throughout.
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Re: SWR of 6.21% for 26 years
03302004, 09:11 PM

#102

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Join Date: Dec 2003
Posts: 4,459

Re: SWR of 6.21% for 26 years
Quote:
Give me two variables related to the stock markets, and show me the correlation formula that linearly relates them. *SHOW ME.

Next, you'll ask SG to prove that you have free will.
Two generally accepted correlations are shortterm price momentum and longerterm mean reversion. Here's a random paper I googled that attempts to model mean reversion:
http://www.stat.fi/isi99/proceedings...o/kim_0290.pdf
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Re: SWR of 6.21% for 26 years
03302004, 09:20 PM

#103

Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Posts: 22,697

Re: SWR of 6.21% for 26 years
I need no proof of that
I understand the rtm concept as an (unintended) corrollary to the gordon equation. Stocks move in the long term as a function of earnings and dividends. The net of both is a rise, the market rises to that tune. The net of both is a fall, the market falls at that rate. Thats the long term market return.
That is a fair correlation, in 2030+ year periods.
However, in terms of less than 20 years, and especially in terms less than 10, market movements are significantly away from the mean or the "line" drawn from the gordon equation.
But my confusion in this thread exists because SG says long term return determinations are not easily gotten, while extensive data shows they are. And he believes that short term determinations are better gotten by some as yet unexplained correlations, when extensive data shows they cannot be. Although he notes that those short term determinations that lead to correlations are hard to identify and quantify.
I hope this all doesnt come across as adversarial or angry/upset. I'm more confused and perplexed than grouchy. Thats why I've asked for the specific points to be drawn from these thousands of words, and something I can read or poke with a stick that provides background or proof points to that.
Always looking to add more arrows to my quiver...
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Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.



Re: SWR of 6.21% for 26 years
03302004, 09:22 PM

#104

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Join Date: Feb 2003
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Posts: 3,588

Re: SWR of 6.21% for 26 years
Quote:
. . . Give me two variables related to the stock markets, and show me the correlation formula that linearly relates them. *SHOW ME.
If they did exist, they would be incorporated into a sophisticated monte carlo program. *To my knowledge, they dont exist, and therefore dont find themselves in a monte carlo. *Disagree? *SHOW ME.

TH, I'm not going to teach a course on mathematics on this board. You can choose to believe that a correlation coefficient cannot be calculated for any two data sets if you wish. That is not an informed position. You are simply wrong about that. If you seriously want to find the correlation in some data sets, I suggest you purchase or borrow a statistical analysis package. All of the stat package software I've ever seen includes a builtin function that will compute correlation of data for you. Even Excel includes builtin functions to compute correlation coefficient for any two sets of data. Formula to compute that coefficient are also provided via Excel help.
I could take on this same kind of argument with you. . . You believe that no correlation between data sets exist. SHOW ME.
Clearly, we have gone past the point of productive discussion with that kind of response. That is unfortunate.
Quote:
. . . I unconcede the correlations bit, because you are alternately saying there are clear correlations that cause market behavior, then saying they cant be (easily) measured or explained. *If they are there, they are measurable or explicable. *If they arent measurable or explicable, they arent there. *PROVE ME WRONG.

I hope I never said that the correlations are not measurable. If I did, I misspoke. Correlation coefficient is always measureable. The correlation may be positive or negative and may be week or strong or zero. The root cause of the correlation may not be known or understood, but the correlation can be quantified.
Quote:
. . . You haven't responded to any of my invitations to show me examples of correlations that most professional mathematicians who have performed extensive analysis of the market say do not exist. *You havent shown me examples of the correlation formulas that are incorporated into monte carlo simulations, or a monte carlo simulation that uses formulae to calculate where the market can or should go based on these correlative factors.

I think you misread my post about monte carlo analysis. The only example of correlation I have ever seen included in a SWR monte carlo simulator was the one I mentioned that was discussed on the nofeeboards discussion. But here's how it works.
For the typical noncorrelated monte carlo simulation, the simulation of each year begins by using a random number generator along with a modeled distribution to produce a number to represent stock return. Two additional random number generations and distributions also produce a number to represent bond return and inflation. These numbers are used to advance the state of the portfolio 1 year. The process is repeated for each additional year.
To include correlation between stock return and bond return (for example), you would modify the above so that the distribution of possible bond returns is made to be a function of the stock return that is generated each year. One way to establish the function you use can be to first plot all annual stock return and bond return data, then fit that data to a wellchosen curve. There are other more sophisticated ways.
I spent several years of my life developing monte carlo simulators to predict the flow and scatter of electrons within compound semiconductors. In that analysis, many of the variables were assumed to be correlated and the inclusion of that correlation was routine. Monte carlo simulations for many other types of physical and social problems is common. These types of simulations are significantly more complex than the SWR simulators  primarily because those simulation developments are highly funded. It was not unusual to have multiple graduate students work for a year or more to develop an appropriate correlation technique for a single variable.
I think if you read some of the other posts here by ***** and gummy and a few others, you will see that several of them have produced correlated data as a key element of the analysis they describe.
Quote:
. . . My failure to do so successfully indicates you are a bad explainer or I'm a bad understander. *I'll accept fault, so please tell me what your point(s) are exactly again? *Maybe someone else can explain them to me?
. . .
Help me help you.

I'm in no need of help, thankyou.
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Re: SWR of 6.21% for 26 years
03302004, 09:31 PM

#105

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Join Date: Feb 2003
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Posts: 3,588

Re: SWR of 6.21% for 26 years
Quote:
Hi SG,
As usual you make a lot of good points. * I will nitpick this one though: . . .
*

Of course you are correct, raddr. But you will note that I chose my words carefully. I did not say that this was of no concern to me, but rather that it was of little concern to me.
There is also the problem that there is some correlation of financial results from year to year while there is no correlation of the coin toss results.
Clearly, independent series of years would be preferred over the overlapping data we have. But, as I pointed out, if we had more nonoverlapping data I would worry about the relevance of data earlier than 1871.
What we need is a reliable crystal ball  not a historical simulator.
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Re: SWR of 6.21% for 26 years
03302004, 09:40 PM

#106

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Re: SWR of 6.21% for 26 years
Quote:
. . . It is possible to determine from looking at the historical database what effect changes in valuation levels have had in the past and then make the necessary adjustment to reflect that factor. But the bubble level valuation levels have never been experienced before. It is not possible to "find" them by looking at the data in the database without making an adjustment.

Well . . . the problem is that an empirically determined dependance cannot necessarily be extrapoltaed outside of the range of available data. When I look at the data you posted, for example, it looks to me like the data is best described by an assymptotic function that is nearly totally saturated at any PE10 above 18 or 20. In fact, I fit your data to a very simple exponential function that assymptotically approaches a HDBR50 value of 4.15%. If I use that function to extrapolate beyond the existing data, I get a very different result.
Quote:
The conventional methodology does not call for any adjustment for this critical effect. That's why Bernstein says that the results of the conventional methodology studies are "at times misleading." Do you think that Bernstein is wrong about this?

I think he may be right and he may be wrong.
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Re: SWR of 6.21% for 26 years
03302004, 09:49 PM

#107

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Posts: 4,459

Re: SWR of 6.21% for 26 years
Quote:
But my confusion in this thread exists because SG says long term return determinations are not easily gotten, while extensive data shows they are.

Sort of. If you include a fudge factor called the Equity Risk Premium. And when that doesn't work, throw in another fudge factor called the rate of P/E growth. And when that doesn't work, then throw up your hands and insist that mean reversion will make things right some day.
Quote:
And he believes that short term determinations are better gotten by some as yet unexplained correlations, when extensive data shows they cannot be.

Huh? Did you notice the market dive when bombs went off in Spain? There are lots of correlations that drive shortterm moves. What economists would like you to believe is that you can't exploit any of them to your advantage. I don't believe them.
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Re: SWR of 6.21% for 26 years
03302004, 10:15 PM

#108

Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Re: SWR of 6.21% for 26 years
Quote:
TH, I'm not going to teach a course on mathematics on this board.[...]Formula to compute that coefficient are also provided via Excel help.

You didnt specify your points (again). And you are misspeaking my point(s). I did not say that correlation cannot be determined between two data sets. You get specific, and then overgeneralize. I said that the short to medium movements of the stock market can not be determined mathematically. You disagreed and said that it could, and that there were factors in the market that demonstrated correlation, but that they were hard to express. I disagreed that there were any correlations that could be used to determine future market direction next year, five years later, or any time in between. I dont need a statistical package to show me what a thousand mathematicians have already proven. There are no short term correlative data that you can use to predict market movements. Not even a hint of one.
Quote:
I could take on this same kind of argument with you. . . You believe that no correlation between data sets exist. SHOW ME.

Ok.
Markets and individual stocks have moved both up and down or stayed the same, repeatedly when:
Inflation is low or high or moving in one direction or the other.
Interest rates are low or high or moving in one direction or the other.
Corporate earnings are low or high or moving in one direction or the other.
Dividends are low or high or moving in one direction or the other.
Yesterdays price was up or down.
Todays was trending higher or lower.
A company's stock has gone higher and lower and stayed the same when announcing better, worse, or spot on earnings or any other result or expressed report, news or number.
Do I need to go on? Do I need to bring up specifics? Wheres the correlation?!?
Quote:
Clearly, we have gone past the point of productive discussion with that kind of response. That is unfortunate.

I didnt think so, and I'm sorry you do. I said I didnt understand your position and asked you to reexpress it so I could understand it. So far a lot of the opinions you expressed are contrary to what I have seen, and I wanted to see the background and data that supports your opinions. Instead you've said I didnt understand your points, and havent provided me with any backup. I can either give up (a frequently considered option), or ask again. Is your intention to "win", to have me "give up" or to express an opinion and have a reasonable person understand it?
Quote:
I hope I never said that the correlations are not measurable. If I did, I misspoke. Correlation coefficient is always measureable. The correlation may be positive or negative and may be week or strong or zero. The root cause of the correlation may not be known or understood, but the correlation can be quantified.

Yes you did.
"That does not imply that the correlation is 1 (ie completely predictive) or even that I can quantify it. "
"The correlation is not simple and it is not easily captured mathematically, but it is real."
You then went on to say that whether or not it is quantifiable, you can still draw a correlation from it. I'm not a mathematician, but correlation DOES say that you can quantify it. In every textbook definition I can find. IS there a correlation for short to medium term market movements? WHAT is it? HOW do you quantify it?
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Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.



Re: SWR of 6.21% for 26 years
03302004, 10:16 PM

#109

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Re: SWR of 6.21% for 26 years
Quote:
I think you misread my post about monte carlo analysis. [...]

I do not doubt you have created non stock market monte carlo simulations. I am far from a stranger to them. However your original comment on these said:
"[1]Financial returns and inflation are correlated to each other and to the results of previous years. [2]The correlation is not simple and it is not easily captured mathematically, but it is real. [3]This is precisely the reason why Monte Carlo simulations tend to predict less optimistic withdrawal rates than historical simulators. [4]Monte Carlo simulations fail to capture the correlations between the returns and inflation data. "
Your statement [1] as discussed above is unsupported by ANY data that I have ever seen and essentially says that there should be a way to determine current and future gains based on the past, hence a formula, hence actively managed funds that follow the formula should beat indexes. Your [2] is discussed above. Your [3] I debated that the reason why monte carlo situations return less optimistic results is NOT due to a failure to capture this immeasurable correlation, but because they string random years returns together to produce worse than historical data. You argued that NO, this is not the reason, its because monte carlo models DO incorporate this. Which is it? Then you use the word "random" several times, without inclusion of any magical correlation formulas in them, in describing how the stock market/portfolio monte carlo situations work.
Quote:
I think if you read some of the other posts here by ***** and gummy and a few others, you will see that several of them have produced correlated data as a key element of the analysis they describe.

Please save me a hundred days of reading their posts and show me a demonstrable correlation that you feel is relevant to calculating market returns and SWR's of a given portfolio. If you're talking about the ones included within this thread, I see no obvious correlations.
Quote:
I'm in no need of help, thankyou.

I am, in fact, I need a glass of wine after THIS discourse.
As I said, I suspect if you simply state your opinions, one sentence to each, on this total topic, we may find we completely agree. It just seems to me that an abundance of your posts contradict each other, are unnecessary argumentative (with me), and are not based in any well accepted or explained science that I'm aware of.
Tell me what your positions are, please be objective, and please give me a balance of data that I can peruse to add this understanding to my own. I try to do the same when I offer opinions and will certainly do so when challenged.
Or I'll offer "I got nothin'".
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Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.



Re: SWR of 6.21% for 26 years
03312004, 02:20 AM

#110


Re: SWR of 6.21% for 26 years
I had a Monte Carlo once. Never ran worth a damn.
John Galt
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Re: SWR of 6.21% for 26 years
03312004, 04:12 AM

#111

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Join Date: Oct 2003
Posts: 29

Re: SWR of 6.21% for 26 years
About using correlation in Monte Carlo simulation, there's a spreadsheet described here which does that:
http://home.golden.net/~pjponzo/MonteCarlo.htm
About correlation between various assets, there's a table (somewhere near the bottom) here:
http://home.golden.net/~pjponzo/Covariance.htm
And a question which has always interested me:
For those on this board who suggest using SWR when you're retired (and withdrawing from your portfolio),
do you imagine doing this each year on (say) January 1 and using the result to determine what you'll withdraw
... for the remainder of that year ?
I'm retired (and withdrawing) but I've never considered doing any SWR calculation to determine my withdrawals.
As has been noted by arrete, after a bad year me & the missus don't go nowhere or spend much ... but play canasta instead
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Re: SWR of 6.21% for 26 years
03312004, 04:24 AM

#112

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Join Date: Oct 2003
Posts: 29

Re: SWR of 6.21% for 26 years
Oops ... another question that interests me**:
If somebuddy asked you to suggest a "Safe" withdrawal rate for the next 27 years, would you suggest something around 4%?
If the person then mentioned that they had started withdrawing three years ago at 4% and now their rate happened to be 6%, would you change your suggested "Safe" withdrawal rate to something around 6%?
** Sorry, but it seems in old age almost everything interests me
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Re: SWR of 6.21% for 26 years
03312004, 05:17 AM

#113

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Posts: 2,627

Re: SWR of 6.21% for 26 years
Quote:
Oops ... another question that interests me**:
If somebuddy asked you to suggest a "Safe" withdrawal rate for the next 27 years, would you suggest something around 4%?
If the person then mentioned that they had started withdrawing three years ago at 4% and now their rate happened to be 6%, would you change your suggested "Safe" withdrawal rate to something around 6%?
** Sorry, but it seems in old age almost everything interests me

My using FIREcalc is like a kid with a new toy, and I have no nearterm stake in determining a "safe" SWR, but I'll offer the opinion I'm forming based on FIREcalc's analysis, my confidence in the statistical support and my complete ignorance/disregard for market movements or valuations which I haven't studied yet.
I would now go for less than 4.19%. I'm not sure how much lessmaybe a few tenths of a percent, maybe a half to 2% lessbut 4.19% is clearly pushing the limits of historical 30year survivability, and even if one were to believe no future 30year period could be harsher on a portfolio than the past periodsin which I don't have high confidencethe granularity of the data and overlapping samples alone indicate to me the need for a buffer zone / lower SWR.
With the above judgement qualifications, I would not adjust a SWR upward based on today's 6% being the result of a past 4% or "safe" rate.
To my eyes, the biggest problem with SWR is you have to decide what it is when you're still in prime earning years but only find if it succeeds after you've been out of the workforce for many years and have a higher probability of health problems, general crumudgeonness towards potential coworkers and the complete loss of restraint for telling a boss he's stupid and can go to hell.
What caught my interest and got me involved in this discussion is the apparent paradox of "100% safe" 4.19% in 2000 and the proposed conclusion that 6.21% in 2004 is equally safe.
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Re: SWR of 6.21% for 26 years
03312004, 05:56 AM

#114

Dryer sheet aficionado
Join Date: Oct 2003
Posts: 29

Re: SWR of 6.21% for 26 years
BigMoney:
I always found it curious that people who calculate a 30year SWR based upon the worst 30 years (in the last 75 or 100 years) assume (I suppose?) that they're considering calendar years: Jan thru Dec.
Has anybuddy considered years starting in Feb or Mar or whatever?
Suppose that one DID determine the "worstoftheworst". (Would it be even worser?)
And what's the effect of interchanging some of the years in that "worstoftheworst" 30year period?
For example, in the Jan, 1930  Dec, 1959 example I considered earlier, the "Safe" rate was 4.08%.
If, however, I interchange just two returns and inflation rates, switching 1933 with 1937, that SWR becomes 3.13%.
(You'll note that the two sets of 30 annual returns/inflation have exactly the same Mean,Volatility and Distribution.)
Although I (normally) hate to give advice, I do make suggestions for my kids ... like so:
Figure out what income you think you'll need from your portfolio, at retirement, by using that notorious 4% rule.
(That is, determine what annual income you'll need and multiply by 25 to get an estimate of your required portfolio at retirement).
Then, when you retire, completely forget SWR and withdraw (each year) according to what happened to your portfolio during the previous year
... and learn to play canasta
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Re: SWR of 6.21% for 26 years
03312004, 07:08 AM

#115

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Posts: 3,588

Re: SWR of 6.21% for 26 years
Quote:
. . . However your original comment on these said:
"[1]Financial returns and inflation are correlated to each other and to the results of previous years. *[2]The correlation is not simple and it is not easily captured mathematically, but it is real. *[3]This is precisely the reason why Monte Carlo simulations tend to predict less optimistic withdrawal rates than historical simulators. *[4]Monte Carlo simulations fail to capture the correlations between the returns and inflation data. "

I'll stand by that statement completely. I am quite certain of the truth of that statement and believe that most people who develop and use such techniques are well aware of the truth of that statement. The fact that you interpret what I've said to be meaningless or false is just something that I will live with.
The reason that the correlation I am speaking about in this particular statement is difficult to capture mathematically is because one of the data sets (ie. future returns) is not yet known and the cause and effect relationship of the correlation is too complex to describe with simple formula  or even to capture in advance. Once two data sets are known (as in the case of historical data) the correlation can always be captured.
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Re: SWR of 6.21% for 26 years
03312004, 07:31 AM

#116

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Posts: 3,588

Re: SWR of 6.21% for 26 years
Quote:
. . . So far a lot of the opinions you expressed are contrary to what I have seen, and I wanted to see the background and data that supports your opinions. *

At this point, I don't even understand what you think I said. And I certainly don't understand what you are expecting from me? I do value your inputs on this board and respect you, however, so lets see if we can find some common ground.
This whole discussion started because I pointed out that amt's conclusion (that the RE of today could retire with a 6.2% initial withdrawal rate and be as safe as the RE2000 who started with a FIRECALC approved 100% safe 4.1% withdrawal) was correct, logical and mathematically sound. I went on to point out that if you don't believe Mr. RE2004 will be safe with a 6.2% initial withdrawal rate, then you should question the safety of the 4.1% rate.
Do we agree on that? Because that's the key point here.
The reason that the statements above are true is not related to some postFIRECALC analysis that is inconsistent with the underlying principles within FIRECALC. It is not because we used a 100% safe rate as opposed to a 90% or 80% safe rate. It is because FIRECALC calculates the safe rate based on the worst case. So as long as you can know that a prior year will provide a retirement series that is worse than the retirement year you are currently in, you can start your calculations from that point.
Do we agree on that?
I don't believe that I can develop a simulator that will predict future returns  long, mid or short.
Do we agree on that?
And finally, just because I cannot predict the future does not mean that the future is not causally connected to the present and to the past.
Do we agree on that?
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Re: SWR of 6.21% for 26 years
03312004, 07:38 AM

#117

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Re: SWR of 6.21% for 26 years
Quote:
BigMoney:
I always found it curious that people who calculate a 30year SWR based upon the worst 30 years (in the last 75 or 100 years) assume (I suppose?) that they're considering calendar years: Jan thru Dec.

I have assumed the reason is that freelyavailable market return data are for endofyear only, but I may be mistaken. That's part of what I mean when I mention FIREcalc's data having granularity concerns, although I may be gobbeldygooking the terminology. It would certainly feel a little more comfortable to have a simulator run data sets beginning in a given month or even a given day of the year or model multiple intrayear withdrawals or even randomly scattered withdrawals throughout each year and see how that affects historical SWR. It's not immediately clear to me if it would reduce the statistical error, but that's nitpicking the process again.
If there is a finergrained freely useable data set, somebody point me to it and maybe I'll attempt Yet Another SWR Caculator, but my enthusiasm is already waning. But sometime in the next 1530 years I'll probably get interested again.
Quote:
For example, in the Jan, 1930  Dec, 1959 example I considered earlier, the "Safe" rate was 4.08%.
If, however, I interchange just two returns and inflation rates, switching 1933 with 1937, that SWR becomes 3.13%.
(You'll note that the two sets of 30 annual returns/inflation have exactly the same Mean,Volatility and Distribution.)

That kind of talk can spawn a whole new 8page thread on historical analysis versus Monte Carlo versus market motion versus fluctuation. Intuitively I feel like shortterm losses can easily be greater than historical happenings but long term performance will on average be positive. I have no evidence to support that; it's just my gut. (Of course it's such a vague proclomation that it's hard to be wrong.) Switching historical yearly returns like that doesn't sound statistically reasonable, but it's an interesting exercise nonetheless.
Your advice is among the best I've seen. But I don't know how to play Canasta; can other card games be substituted without disturbing statistical analysis, correlation or valuation?
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Re: SWR of 6.21% for 26 years
03312004, 07:44 AM

#118

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Re: SWR of 6.21% for 26 years
Quote:
And finally, just because I cannot predict the future does not mean that the future is not causally connected to the present and to the past.

Yeah, I don't believe in free will either. We're really deterministic meat machines, but I still enjoy the illusion
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Re: SWR of 6.21% for 26 years
03312004, 08:00 AM

#119

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Re: SWR of 6.21% for 26 years
Quote:
This whole discussion started because I pointed out that amt's conclusion (that the RE of today could retire with a 6.2% initial withdrawal rate and be as safe as the RE2000 who started with a FIRECALC approved 100% safe 4.1% withdrawal) was correct, logical and mathematically sound. I went on to point out that if you don't believe Mr. RE2004 will be safe with a 6.2% initial withdrawal rate, then you should question the safety of the 4.1% rate.

That wasn't aimed at me (at least not directly), but worded that way I agree completely. My earlier arguments were directed at a percieved paradox and then a perceived perversion of statistics. But as quoted I agree 100%. (and 100% safely)
I think the catch is the first time I heard the argument I took ". . . and be as safe as . . ." to mean that 6% was supported by FIREcalc as 100% safe. But now I read it that if 6% doesn't sound good now then why did 4% sound so good 4 years ago?
I suppose the easy answer is that we didn't really expect 2000 to be remotely comparable to 1929, and 4 years later we're not as willing to let the bet ride. The more interesting answers we are now getting to is how 20002004 affects our conclusions from our analyses and whether we should have seen it in 2000.
EDIT: I wouldn't have seen it; in 2000 I was just getting into personal finance and TMF, and I was a happy follower of TMF's stock cheering. That DOW 40,000 book sounded like a reasonable possibility, although I didn't read the book and now forget when we were supposed to hit 40,000. I'm just thankful I didn't try getting out of index funds to pick my own stocks.
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Re: SWR of 6.21% for 26 years
03312004, 09:33 AM

#120

Full time employment: Posting here.
Join Date: Sep 2003
Posts: 902

Re: SWR of 6.21% for 26 years
Quote:
Although I (normally) hate to give advice, I do make suggestions for my kids ... like so:
Figure out what income you think you'll need from your portfolio, at retirement, by using that notorious 4% rule.
(That is, determine what annual income you'll need and multiply by 25 to get an estimate of your required portfolio at retirement).
Then, when you retire, completely forget SWR and withdraw (each year) according to what happened to your portfolio during the previous year

Excellent advice! I plan to follow it. And thanks for the excellent tools you provide on your site. They have been very helpful.
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