 Quote: Originally Posted by youbet  I used a very similar approach to yours before I stumbled across FireCalc and now realize how dangerous that approach is. When you assume some annual average return, in your case 6.3%, you're making an assumption highly unlikely to occur. Yeah, you might make an average near 6.3% but that will be the average of years much higher than 6.3% and much lower than 6.3%. And order matters! Having good years early and bad years later is better than the other way around. Or said another eay, a series of years each yielding 6.3% will have very different results from a series of years each varying from 6.3% but averaging 6.3% in aggregate. | While I don't disagree agree with your analysis in general, in this case he's only talking about a 6.3% nominal payout. This is fairly easy to obtain today with a good quality corpotate bond fund (e.g, VWETX). So long as the interest payments are stable, one can ignore the price-fluctuations since they are not part of the payout. The bigger problem, IMO, is the 2% inflation assumption. Using a higher inflation assumption would lead to a higher required total return, which would likely force investment in more risky assets, e.g. stocks, in which case your argument becomes important. Nevertheless, Firecalc indicates a 100% success rate with a SWR of 3.4% for 30 years, even with a 100% stock allocation.
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