Sanity check my worksheet

[HighFlight]

All, As we get close to FIRE, I'm working to come up with an easy SWR worksheet. I've attached an Excel spreadsheet. Could someone check my formulas and math and see if I've made any errors? The numbers are only placeholders, and don't reflect an accurate initial balance for us.

I also just randomly increased/reduced the growth and inflation rates to add a measure of variability to the data.

Thanks!
HF

 

[pb4uski]

I don't think it makes sense at all.

First, withdrawals don't increase for inflation. The first year withdrawal is correct, but the second year withdrawal would be the first year withdrawal * (1+i) where i=inflation.. so in your case $51,000 rather than $49,110.25.

Also, the beginning of year balance is usually the prior end of year balance.

It seems like you are trying to mix nominal and real numbers... IMO it is preferable to stick with nominal and then adjust to real as a final step if you want to.

 

[target2019]

Must be a gummy sheet that helps. Looks so simple?
https://www.financialwisdomforum.org/gummy-stuff/SWR2.htm

 

[sakowitzm]

I think the inflation rate is problematic, over a long time period like 35 years. From 1968 to 1981, a period of 14 years, the US annual inflation rate was never *lower* than 3.3% and for several years was *greater than* 10%. Even after 1981, inflation was mostly higher than 3.8% for another ten years.

As "recently" as 2004-2007 inflation averaged 3.3% for those four years.