I got the idea to go dig out the spreadsheet I used to model retirement at the time that I stopped working and see what it said for 2023.
My assumptions were inflation 5% and investment return 4%. My assumption about the initial spending amount was about $10,000 more than I seem to have spent on average.
My end of 2023 total portfolio value is about 5% more than I had in the 2016 spreadsheet.
My average annual portfolio return (not accounting for compounding, but accounting for spending) is 4.3% from mid 2016 through 2023. That is compared to my initial 4% estimate. Not a very good return, but at least I was realistic about my individual situation.
Of course it is just one data point on a random time frame, but it seems to me to be pretty accurate for a simple back of the napkin spreadsheet.
Listening to the Boglehead Conference video today it seems I am following a strategy of having the lowest equity allocation at retirement and increasing over time. In my case, I have been spending cash from my taxable account and also trying to DCA into more equities.
So, the 2016 spreadsheet may not accurately model my situation going forward, but I was surprised to see that it tracked as well as it did for the past 7.5 years.
My assumptions were inflation 5% and investment return 4%. My assumption about the initial spending amount was about $10,000 more than I seem to have spent on average.
My end of 2023 total portfolio value is about 5% more than I had in the 2016 spreadsheet.
My average annual portfolio return (not accounting for compounding, but accounting for spending) is 4.3% from mid 2016 through 2023. That is compared to my initial 4% estimate. Not a very good return, but at least I was realistic about my individual situation.
Of course it is just one data point on a random time frame, but it seems to me to be pretty accurate for a simple back of the napkin spreadsheet.
Listening to the Boglehead Conference video today it seems I am following a strategy of having the lowest equity allocation at retirement and increasing over time. In my case, I have been spending cash from my taxable account and also trying to DCA into more equities.
So, the 2016 spreadsheet may not accurately model my situation going forward, but I was surprised to see that it tracked as well as it did for the past 7.5 years.