REattempt
Recycles dryer sheets
- Joined
- Feb 27, 2010
- Messages
- 293
Wade Pfau has an article coming out this month in the Journal for Financial Planning:
Capital Market Expectations, Asset Allocation, and Safe Withdrawal Rates
He posits that using capital market expectations (returns, deviations and correlations) along with asset allocation to optimize SWR....AND predict some level of reasonable SWR based on longevity etc.
Nice read.
He also has a follow-up in his blog with more information...
Pensions, Retirement Planning, and Economics Blog: Capital Market Expectations, Asset Allocation, and Safe Withdrawal Rates: Additional Results
The two most interesting parts are:
1) the impact of fees (see figure 9 in the blog post) is big
2) that optimization occurs at relatively low stock allocations
THE most interesting personal observation is that the SWR for a 40 year retirement and 1% failure rate is 2.8%.
2.8% is the WR I established my budget against and put in my Withdrawal Policy Statement!!!
Capital Market Expectations, Asset Allocation, and Safe Withdrawal Rates
He posits that using capital market expectations (returns, deviations and correlations) along with asset allocation to optimize SWR....AND predict some level of reasonable SWR based on longevity etc.
Nice read.
He also has a follow-up in his blog with more information...
Pensions, Retirement Planning, and Economics Blog: Capital Market Expectations, Asset Allocation, and Safe Withdrawal Rates: Additional Results
The two most interesting parts are:
1) the impact of fees (see figure 9 in the blog post) is big
2) that optimization occurs at relatively low stock allocations
THE most interesting personal observation is that the SWR for a 40 year retirement and 1% failure rate is 2.8%.
2.8% is the WR I established my budget against and put in my Withdrawal Policy Statement!!!