From another thread I observed the dialogue between two of the long-time members:
I used FireCalc with default 75% stock, 54-year outlook, 2.2% expense (2% to account for "slower economic growth due to the retiring boomers", and 0.2% for real expenses). FireCalc gave 2.55% SWR as 100% safe.
amt
I think if your retirement plan passes the FIRECalc test for retiring in 1928 and your portfolio survives for 54 years until 1982, it would cover some fairly grim periods of U.S. Stock market history. Also this scenario leaves out the biggest bull market in history with current stock valuations much less than they were in 1928!
Is this the worst case scenario? - No! , but I think if we have a repeat of the great depression, we will have greater problems than our portfolios.
I think it's a reasonable bet that your portfolio will fare better over the next 52 years than it did from 1928-1982.
I'll buy that. During that period, transistors, computers, and the internet were invented. And as we now know, all turned out to be tremendous anti-productivity tools. So unless we invent something in the next 50 years that allows us to waste more time, it's reasonable to expect the 8% or so from stocks that we got during that period as baseline. And then subtract 2% for slower economic growth due to the retiring boomers, and I think that's a reasonable worst case.
I used FireCalc with default 75% stock, 54-year outlook, 2.2% expense (2% to account for "slower economic growth due to the retiring boomers", and 0.2% for real expenses). FireCalc gave 2.55% SWR as 100% safe.
amt