pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
.....Widowers ... tend to either remarry or die fairly quickly (with some exceptions, obviously).
Now that sounds like a really tough decision!
.....Widowers ... tend to either remarry or die fairly quickly (with some exceptions, obviously).
Many thanks, Fred and Photoguy. This confirms my suspicion, yet again, that these guys are determined to create whatever model will give the most depressing result yet not appear obviously flawed on the surface.Good points from all, especially the 2% adjustment. If I plug this in, I get a success rate of about 95%. And it's very hard to justify this adjustment, given that they use CAPE to predict stock returns, and the CAPE is apparently based on US stocks, while the adjustment is supposed to represent an international portfolio. Another problem is that the arbitrary PE10 5<->45 limits arbitrarily constrains the stock return to a range between about -14% to 20%. And the variance of the stock return distribution is much smaller than the S&P 500 variance.
I've convinced myself that the model has so many flaws that it isn't worth spending any more time on it (although independent verification would be welcome). And makes me desire a decent open source retirement calculator.
audreyh1 said:Many thanks, Fred and Photoguy. This confirms my suspicion, yet again, that these guys are determined to create whatever model will give the most depressing result yet not appear obviously flawed on the surface.
I've been reading Pfau for a while now and he seems like a straight shooter. Many other pros look at his work and make critiques of it , e.g., Micheal Kitces, but they all seem to respect him and his methodology.
Fred, it's worth visiting his blog and posting your thoughts there, or just email him. He has a lot of influence so I, for one, would love to see what would come of your findings. Plus I'm sure you would also like to see for yourself who really is correct here.
Here's a link to his blog post about this article. I think it would be great if you would post your objections there
Retirement Researcher Blog: Asset Valuations and Safe Portfolio Withdrawal Rates
Brian
Something along the lines of the old joke: "the reason academic politics are so bitter is that so little is at stake."