withdraw rates graph

[mmcc]

Here's essentially the same graph varying the length of retirement instead of the stock/bond ratio (stock allocation is fixed at 60%). No surprises, although I wish it was a prettier picture for us ER folks.

TimeVaryingMaxWithdrawRates.jpg

BTW, one of my pet peeves is almost all retirement-related books and papers use a 20 or 30-year retirement. For some here 40 years or even 50+ years is not out of the question.

samclem: just an observation.... I believe using Shiller's data your harvesting approach would come close to a highest-first scheme (given the long interest rate is used and never has a loss, as Independent pointed out)

Independent: interesting info. Thanks.

[mmcc]

Quote:

Originally Posted by mmcc Flipping through a new book, "Your Nest Egg Game Plan", I found a nice bar graph showing the maximum safe initial withdraw rates by starting year for a 60/40 US stock-bond portfolio. (The graph is copyrighted by The Kite Report, a monthly financial newsletter, but I didn't see it on the associated web site.) I liked the graph since it gave sort of birds-eye view of FireCalc results for a vanilla 60/40 portfolio. Unfortunately, the data in the book's graph was wrong, showing around a 50% success rate for 6% withdraws and around a 95% success rate for 5% (if it was only true!).

A final update.....I stumbled on a reference saying the Kite Report has published approaches to improving withdraw rates. I'm guessing the book incorrectly referenced the Kite graph as a source of "normal" safe withdraw rates, when in reality Kite was showing their improved results. This is probably just a bit of trivia here, but I wanted to be fair to the Kite Report since I said above the published data was wrong.

[Cb]

I believe you meant to refer to The Kitces Report...

http://www.kitces.com/blog/index.php