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- Financial tools such as Firecalc, wonderful as they are, have embedded within them as their major assumption that the future in front of us will never be worse than the past. There will never be a financial dislocation, for instance, worse the 1930's.
I didn't quote all the preceding, but I think they are reasonable observations.
FIRECALC is a tool - it does exactly as you say (assuming no programming/data errors!). But then you can use that as an input to your decisions, not make it
the decision. It's why I prefer to shoot for 100% success, take the most conservative view of a 30 or 40 or 50 year portfolio (longer time frames also reduce the data set, so it may give a counter-intuitive higher success for longer time frames), and keep my expected spending level with inflation (rather than assume my spending will decrease with age).
All of those will provide some buffer, but it's still a crap-shoot, but as I've said before - so is getting out of bed to go to work.
Note that the 70's were about as bad/worse for a retiree's portfolio as the 30/s.
I say all these things with not a little reticence. After lurking here for awhile it's clear that there are an awful lot of smart people around. The financial acumen on this site is incredibly high. Far be it for me, a relative newbie, to suggest that there might be a fly in the ointment.
Your input is certainly as valid as anyone else on this forum. I listen more attentively to a first time poster who presents reasons/data along with their viewpoint than I do one of us blow-hards with thousands of posts who just repeats the same self-proclaimed mantra with nothing to back it up.
Maybe I'm in the minority, but I'd much rather have someone warn me about the fly in the ointment than to choke on it because I wasn't warned. I find it interesting, but some people really don't want to be warned - I can't understand that (outside of harmless 'white lies').
That said, I've got a fairly high allocation to stocks. I don't disagree with your points, but I'm not sure the alternatives are better. Some have pointed out that at any time in history, one could come up with a credible list of why the market was scary. I just don't know, but I'm staying the course until I see a clear alternative.
But thanks for your thoughts, that was a very well written post, IMO.
-ERD50