3 Yrs to Go said:
how many are planning to reduce their withdrawal rate by an equivalent amount
I'm not reducing my withdrawal rate by an "equivalent amount," but:
I believe historical cpi understates the rate of price increases my family has seen. I believe that the bubble in demand for retirement/aging related goods and services caused by the baby boomers (that's me!) will escalate this trend. I don't know exactly how much the cpi understatement is, but those beliefs caused me to delay ER to put some cushion in the plans.
When I start ER in a few weeks, having delayed a few years, my plans call for a WR of less than 4%, a budget that includes some downward flexibility and some options for working part time if the financial markets are unfavorable early in RE.
Sheeeesh...... all that just because a silly spreadsheet I made showed retirement budget increases beyond plan, driven by higher than expected inflation, really take a toll on the portfolio as the years go by! Bummer!
Some factors I've always assumed:
1. Inflation must be accounted for in time periods of more than a few years and inflation levels may be more than commonly used measures, such as cpi, indicate.
2. Meeting or beating planned investment returns over time is not guaranteed.
3. Timing matters. If 10 of your 30 years of withdrawals will be in down markets, it would be much better to have those 10 years at the end rather than the beginning. Unfortunately, we don't know how many down years there will be or when they'll be.
So, having said all that, you walk up to the betting window, you plop down your bet as you see fit, you cheer your horse and you ENJOY YOUR LIFE!