What do you consider an acceptable success %

[REWahoo]

Hike over here son, grab a knee, and I'll tell you about the 60's and 70's.

Hey, I think I've already heard that story. You had to watch b&w TV by candlelight, right?

 

[Alan]

95%

 

[Jarhead*]

Hey, I think I've already heard that story. You had to watch b&w TV by candlelight, right?

Where in hell did you come from?

Blind-Sided by a heckling moderator.

Nice finish to a rain-filled no golf day.

 

[REWahoo]

Blind-Sided by a heckling moderator.

Yeah, lousy timing. On server switchover day I had to draw "heckelator" duty.

 

[unclemick]

Crap

I wanted to relive the fun filled 60's and 70's again.

heh heh heh heh heh heh eh

 

[Sam]

This is more like a footbridge over a high canyon. You have some data that 3 out of 4 people make it over; otherwise it is a long and tiring detour.

3 out of 4 still good enough?

If the footbridge fails, you die. If your fund runs out, you have to cut back on the expense, or get a job. But you don't die. Is 3 out of 4 still good? Yes, it is for me. Fortunately, for me again, my firecal success rate is 90%. So 9 out of 10 is even better.

 

[cute fuzzy bunny]

Hey, I think I've already heard that story. You had to watch b&w TV by candlelight, right?

While carrying it to school in knee deep snow. Uphill. Both ways.

And we generated electricity by holding a small generator in our teeth and grinding them to turn the generator as we walked, carrying the black and white tv and balancing the candle behind it.

Of course, all this 'certainty' stuff presumes you have the inputs correct. Something about a heisenberg uncertainty principle is ringing a bell...

 

[Independent]

Here is a post from Dory36 going back 3 years that carries the same basic concept. It's helped me come to terms with the "do I have enough" question and stop worrying about moving in with the kids:

http://early-retirement.org/forums/index.php?topic=496.msg6096#msg6096

Yep, looks like the same concept.

But now I want to know - How did you find a 3 year-old post?

 

[REWahoo]

But now I want to know - How did you find a 3 year-old post?

 

[Gone4Good]

Another thing to consider . . .

As we get older, each year becomes more precious and our lifespan shorter. If I were 65 and I had to choose between retiring at an 85% success rate today or working 5 more years to move it up to 90%, I think I'll roll the dice and take my chances.

On the other hand, if I'm 40 and I have to work 10 more years to move from the 80's to the 90's, I think I hunker down and work for greater security.

So with my expectations of a sub-40 retirement age, I'm putting on a couple of belts and suspenders because working the next couple of years is worth the added security over the next 40-60.

 

[laurence]

 

[Delawaredave]

For instance, if you can get long term TIPs at 2.4% real (about the current rate), the SWR for 45 years is about 3.57% (40 years is 3.83%). This becomes more impressive when you consider that most folks will also have social security. Of course, there will be reinvestment risk and CPI risk and probably tax issues, but that is still impressive as an extreme example.

You're right - this is a solid way to get a "4-ish" SWR with high success rate.

The only downside for me is it practically assures full depletion of assets at end of retirement.

The same 4-ish SWR with a 60/40 gives you more "run out of money" doomsday scenarios - but on the upside it offers a number of "die with an incredible estate" situations.

Obviously you "can't take it with you" - but having decent odds of leaving a decent pile of money to my kids/grandkids is attractive. Or, having resources for possible late life medical issues.

 

[WRBT]

If the footbridge fails, you die. If your fund runs out, you have to cut back on the expense, or get a job.

Exactly what I was thinking... and funny the post you refer to started with an admonishment about poor analogies.

If someone lucked into a lottery or inheritance windfall retirement despite having never saved a dime I'd lean more towards the 100% safety, but all these resourceful, financially saavy, disciplined posters? Nahhh I suspect most would easily adjust and do fine if they rolled the 10% dice on the 90% safety.

 

[youbet]

all these resourceful, financially saavy, disciplined posters? Nahhh I suspect most would easily adjust and do fine if they rolled the 10% dice on the 90% safety.

That might work for you........but the concept didn't set well with me so I planned to be able to continue discretionary spending even in down markets. Those "easy adjustments" just didn't look so easy to me!

 

[Cb]

That might work for you........but the concept didn't set well with me so I planned to be able to continue discretionary spending even in down markets. Those "easy adjustments" just didn't look so easy to me!

Why not just defer "long-cycle" discretionary expenditures such as auto replacements or remodeling projects during down years? Or dial it back a few notches on vacation outlays? I don't think 5-10% swings in our annual draw will be all that painful.

Sure beats working. 8)

Cb

 

[Gone4Good]

Why not just defer "long-cycle" discretionary expenditures such as auto replacements or remodeling projects during down years? Or dial it back a few notches on vacation outlays? I don't think 5-10% swings in our annual draw will be all that painful.

Sure beats working. 8)

Cb

I guess this is a danger for the LBYM types who have squeezed every possible penny in their budget. It helped to build the portfolio, but it may be worth considering that all 4% withdrawal schemes are not created equally.

 

[wabmester]

all these resourceful, financially saavy, disciplined posters? Nahhh I suspect most would easily adjust and do fine if they rolled the 10% dice on the 90% safety.

So, our fictional financially savvy early-retiree retires in 1966 with $30K expenses and $750K in 75/25 stocks/bonds.

If he sticks to the 4% SWR and maintains the discipline to stay at 75/25, he's on a course to run out of money in 22 years.

What does our hero do? Does he cut back spending each year? Does he change his allocation once his nest egg is cut in half at year 9? Does he go back to work after a decade of being out of the rat race?

What is *your* savvy disciplined plan B?

 

[unclemick]

5k in 1966 on a 8.3k income - single and rich.

Throttle back to 12k/yr in the early 90's for a 'thrifty yr' and a lot of 18-24k high on the hog years in da ole Louisiana swamp.

heh heh heh heh heh - after a few years of cheap bastardhood and the history of the 90's have the nose bleed problem of spending too much - 5% variable while young at heart.

remember the Bear - agile, mobile and hostile. Really cheap is a labor of love.

 

[wabmester]

agile, mobile and hostile. Really cheap is a labor of love.

Yup. I think I could easily cut my expenses in half if it were just me. Not sure the wife and kid would be thrilled with the idea, though.

BTW, the guy who retired in 1966 had a 100% historical success rate at the time. Bad luck for him that the first failure sequence started in 1966.

 

[d]

one's ability to absorb the risk of lower success %s is clearly related to the amount of slack in one's budget.

 

[Zipper]

~ 85%.

 

[spideyrdpd]

So if it says 85% do you think about cutting costs and living on less moola or do you continue to work and save ?

 

[unclemick]

Chickenheartedness - a seldom used investment term - I adopted from a Bill Cosby monolog(the monster that devoured Cleveland) back when he was young.

In pukker time aka a market downturn of significance - the Norwegian widow likes current yield of your nest egg. I include pension or any other income stream.

Chickenheartedness < or = current yield.

heh heh heh - this under some circumstances could be less than FireCalc or not - depending on your asset mix.

 

[Khan]

Chickenheartedness - a seldom used investment term - I adopted from a Bill Cosby monolog(the monster that devoured Cleveland) back when he was young.

"Smoke and fire and Jello will protect us from the Chicken Heart."

 

[unclemick]

Yep

Someone else remembers.

heh heh heh