Retiring in 1965 - The Worst Time Ever?

[ejman]

4% can be close to ok if you have SS or a pension that replaces a good portion of your spending needs.

For example, take firecalc and a 50 year old single with $1 million in assets and $40k living expenses, 60/40 portfolio and the remaining assumptions defaults. Success ratio is 73.7%.

Now assume that SS replaces 25% of living expenses ($10k in current $) beginning at age 66 and the success ratio increases to 91.6%.

Now assume that instead the person waits until age 70 and receives $13.2k (132%, 8% increase for 4 years) and the success ratio is still 91.6%.

So SS can have a significant impact on a sustainable withdrawal ratio. For me, I would want 98% success which implies a 3.75% WR with SS covering 25% of living expenses ($10k in the scenario above), so it isn't a lot lower than 4%.

Or 92.6% success ratio if SS is started at 62. I guess in this simple scenario it does pay to start SS early (per Firecalc anyway)

 

[haha]

4% can be close to ok if you have SS or a pension that replaces a good portion of your spending needs.

Sure, as is amply proven by those retirees with essentially no savings, What counts is not savings, but cash flow and its reliability.

Ha