Percentage of stock in portfolio

[pb4uski]

The good news is that a 50/50 portfolio is actually safer (100% success rate).
vs the 60/40 or 75/25

Not quite right. FIRECalc with default assumptions. 60/40 as higher success rate than 50/50 (but admittedly not by a lot). 75/25 is same as 50/50. But for all practical purpose they all have minimal risk of ruin... but the higher equity generally have higher ending values.

50/50:

FIRECalc looked at the 119 possible 30 year periods in the available data, starting with a portfolio of $750,000 and spending your specified amounts each year thereafter.

Here is how your portfolio would have fared in each of the 119 cycles. The lowest and highest portfolio balance at the end of your retirement was $-167,964 to $3,108,798, with an average at the end of $860,085. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 6 cycles failed, for a success rate of 95.0%.

60/40:

FIRECalc looked at the 119 possible 30 year periods in the available data, starting with a portfolio of $750,000 and spending your specified amounts each year thereafter.

Here is how your portfolio would have fared in each of the 119 cycles. The lowest and highest portfolio balance at the end of your retirement was $-204,356 to $3,423,674, with an average at the end of $1,062,738. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 5 cycles failed, for a success rate of 95.8%.

75/25:

FIRECalc looked at the 119 possible 30 year periods in the available data, starting with a portfolio of $750,000 and spending your specified amounts each year thereafter.

Here is how your portfolio would have fared in each of the 119 cycles. The lowest and highest portfolio balance at the end of your retirement was $-300,739 to $4,259,606, with an average at the end of $1,400,562. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 6 cycles failed, for a success rate of 95.0%.

 

[big-papa]

Good article on glidepaths and different ways of looking at the problem, including no glide path at all.
https://www.whitecoatinvestor.com/designing-your-glide-path/

And another one poo-pooing the whole idea of glidepaths, which I agree with, especially the last paragraph.
https://www.aaii.com/journal/article/allocation-in-retirement-a-flat-glide-path-always-make-sense

Many things with regards to investing have become dogmatized without a lot of solid data behind it or folks have taken old-rules-of-thumb a little too literally.

What I do.
- My AA is based on historical volatility, historical draw-downs, long term historic returns, my need and willingness to take risk, and I intend it to stay fixed for my entire life. Will the future look more or less like the past? It might "rhyme", but no I don't expect it to look identical, but I also don't need it to, either.
- I won't use an SWR (meaning I won't use any form of a withdrawal method that starts with some percentage and increases the withdrawal each year for inflation). I will use a variable withdrawal method where my withdrawals will fluctuate with my returns. My portfolio does better, I do better, and vice versa. Except for a short bridge between the time I retire and when I start taking SS, my total spending will be based on a fixed floor (SS) plus a variable amount from my portfolio withdrawals. I'd much rather live with a fluctuating withdrawal with 0% mathematical chance of running out of money than any sort of withdrawal method where I'm counting on historic sequences to predict a % chance of not running out of money.

While I won't use SWR methods such as what's used in Firecalc, I still run tools like Firecalc, Fidelity RIP, etc. to get a very rough idea whether I have enough, but I also run my own tools based on my own withdrawal method as well.