Big_Hitter
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just save more and spend less, no biggie
Jack Bogle's dour forecast
- Thread starter broadway
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just save more and spend less, no biggie
Cut-Throat
Thinks s/he gets paid by the post
I still think it's a good planning tool..... And remember the '4% rule' worked in some pretty bad times over the last 100 years.... Also note that the SWR is a 'Worst Case Percentage', and in all probability most people will not experience the Worst Case.
so, the folks that are employing a 3.5%, 3%, 2.5% WR are mostly short changing themselves.
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racy
Full time employment: Posting here.
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I have kept track of some predictions from various sources. Here are Bogle's:
2012 - 7% stks & 3% bonds for next decade, minus 2% inflation.
2015 - 4% stks & 3% bonds for next decade, minus 2% inflation.
2018 - 4% stks & 3.5% bonds for next decade, minus 2% inflation.
FWIW, Michael Kitces in 2016 - Using Shiller PE, real returns of stocks 2% through 2020's, and 1% real for bonds. 2030's and 40's could be quite good for investors.
So, hang in there till the 2030s!
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Seems like Bogle even at his age likes the attention playing the prediction game brings. He just works it from the other angle. Which is to predict lower returns. This way he stays relevant. Less chance of being bashed by disappointed followers. Smart guy but & knows how to work the crowd. He takes no heat for being too conservative but his name continues to echo down the canyon. I think the reality is he has no idea but I think people that think he's gold will be chronically underinvested. But not making as much doesn't bother people quite as much.
What's under-invested? An AA one is comfortable with? AA comfort and B&H. I think that's what he sells all the time. And how can anyone know what under-invested is in real-time? My benchmark is: Do I have enough money? Yes? I am properly invested and my AA is perfect.
Bogel is one of those people (from what I've read over the years) who isn't there to work the crowds. He even gives his math pretty straight up with no hoot or holler. I don't know if he's right but I find little to argue with in his shtick. Except by and hold forever and like it.... I see that as Well, I guess that's one way to do it
Cut-Throat
Thinks s/he gets paid by the post
Exactly.... But the people that are chronically under-invested are trying to 'Time the Market', which even Bogle would not recommend... Better to set your asset allocation for your age instead.
lots of discussions on lower expected returns going forward when pensions adjust their expected returns in order to make themselves look solvent, but the odds of achieving the historical returns (without much higher than normal risk for a pension fund) are "extremely optimistic".
Dtail
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
So theoretically if one were to use the 4% WR adjusted for inflation for the first 10 years of retirement in conjunction with Bogle's prediction, would their 1mm portfolio be at a scary level, then hope for a 2009 -2018 market return scenario.
Cut-Throat
Thinks s/he gets paid by the post
Well, this is very easy to simulate in past history.... Using FireCalc, or VPW Backtesting... Which I'm guessing you've done one or the other or both. And then of course you would have to decide if it was at a 'Scary Level'....
For myself that is retired and employing VPW, there is no 'Scary Level', which is a benefit of VPW for me personally.
Dtail
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Well I will be using the % of remaining portfolio with the Clyatt twist. VPW along the way is less scary as it uses higher yearly WR% and I believe allows the depletion of the portfolio at the end, vs. Clyatt attempts to maintain the original inflation adjusted balance.
So 10 years of lower returns kills the 4% SWR? I don't think so. The last couple of hundred years seem to indicate that decades of low return are followed by decades of higher returns. Unless REWAHOO's asteroid takes care of things in which case all bets are off.
Cut-Throat
Thinks s/he gets paid by the post
So 10 years of lower returns kills the 4% SWR? I don't think so. The last couple of hundred years seem to indicate that decades of low return are followed by decades of higher returns. Unless REWAHOO's asteroid takes care of things in which case all bets are off.
Well, I don't think so either ...... As I said, I think the 4% is a viable planning tool. And I don't think anyone on any investment forum that I've seen, actually employs it.
REWahoo
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Unless REWAHOO's asteroid takes care of things in which case all bets are off.
Yep. Speaking of which...
NASA asteroid WARNING: Giant ONE MILE wide asteroid will skim the Earth before Christmas
bobandsherry
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So he's been spot on... Lol. As I said earlier, anyone can make a prediction. Would be great if there was a site that tracked the predictions of the "experts" against how things turned out. I predict they are wrong more than they are right. [emoji3]
Let's see, closest approach at 1.7 million miles yup time to bend over and plant a big kiss
True, but it's a good reference -lets see, I'm below the magical 4% I'm golden...
street
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Not sure about that. When taking a percentage of remaining portfolio, the *“scary level” is on the income side it seems. Sure, you won’t deplete your portfolio as quickly but your income can quickly become insufficient to cover your expenses if returns are lackluster for a long time.
In my case, I need 1% real returns on my financial assets for my plan to work (to age 100) without selling real estate assets.
Cut-Throat
Thinks s/he gets paid by the post
This has been covered ad infinitum. -- If you set your asset allocation on the lower risk side and take other steps like delaying S.S. to age 70, the downside risk is minimal. Again, use the backtesting of VPW and adjust your portfolio so that there is no 'scary level'.... If there is, you didn't retire with a Big enough portfolio.
Dtail
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Bolded - there is a site out there with some of this info. Don't remember what.
Possibly REWahoo knows...
REWahoo
Give me a museum and I'll fill it. (Picasso) Give
Here you go:
Guru Grades
It's a bit dated (2005 - 2012 data) but I doubt the bottom line of an average accuracy of 47% has changed much.
Guru Grades
It's a bit dated (2005 - 2012 data) but I doubt the bottom line of an average accuracy of 47% has changed much.
GravitySucks
Thinks s/he gets paid by the post
I retired at 54.5 and left enough in my 401K to draw 4.5% each year (no inflation adjustments) and lived in that exclusively till a bit past 59.5 when I could get to my IRA money. So I guess I came pretty close to employing it so far.
