Gone4Good
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Sep 9, 2005
- Messages
- 5,381
Re: A Financial Thought from an Early ER
For someone retiring in 1966 a 4% WR adjusted annually for inflation fails by 1990.
I ran my own simulation to see what life would be like for that 1966 retiree using Guyton's Capital Preservation Rules. And according to my #'s (maybe ESRBob or someone else could verify), the CPR results in a 47% standard of living decrease by 1979 with the first 10% spending reduction happening in 1970.
The "upside" of the CPR is that you never run out of money - but it is also worth knowing what those rules could potentially mean in reduced standard of living.
Cut-Throat said:The SWR that is put out with FieCalc has inflation factored into it already, so your standard of living would not be reduced! If you just continued at 4% without a COLA, you would be cutting back! - Quite dramatically!
For someone retiring in 1966 a 4% WR adjusted annually for inflation fails by 1990.
I ran my own simulation to see what life would be like for that 1966 retiree using Guyton's Capital Preservation Rules. And according to my #'s (maybe ESRBob or someone else could verify), the CPR results in a 47% standard of living decrease by 1979 with the first 10% spending reduction happening in 1970.
The "upside" of the CPR is that you never run out of money - but it is also worth knowing what those rules could potentially mean in reduced standard of living.