clifp
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Oct 27, 2006
- Messages
- 7,733
I didn't read the whole thing, just the excerpts provided above, but I interpret this to mean....
that at the end of 30 years of a 'guranteed' 4.46% SWR, you are also 'guaranteed' to have zero dollars left.
Is that correct? That is how I interpret 'never has a surplus'. If you assume a fixed % return (I don't know how he predicts future returns, or does he just buy 30 year bonds?), you can simply self-annuitize that over 30 years. Is that what the article is saying?
Fine approach - at the same time I can call and have my gravestone carved at today's wages with the year '2038' on it.
edit/add:
OK, I can go plug that into a SS, but 4.46% sounds right if you self-annuitize and assume a 2% real return.
-ERD50
Ah I am glad somebody else caught that. Yes the zero risk portfolio (which contains non-existent 2% TIP short-term bonds) is guaranteed to have zero dollars after 30 years. Clearly the world of financial planning would be vastly simpler if we all agree to check out 30 years after retiring.
I think I am going to start a retirement financial firm called Logan's Run, which will offer 5%+ withdrawals, with a small catch. (Hopefully Chris Wallace will have left Dateline in the next 30 years, before my client discover the catch!).
An interesting article. It is hard argue with his premise that if you'd be happy to see Dylan in concert, it is crazy to take so much risk that you have decent chance of only seeing it on Pay for View.
Still I think by focusing on a fixed length of time, he is really missing the boat on making this applicable to real retirees.