Originally Posted by cardude
Has anyone back tested the 3-4% SWR idea in an environment like Japan's 20 year recession? Will it work? Are we doomed?
Interesting question, I haven't seen any SWR studies for countries outside of the US. My gut level tells me that with the declining stock market and 0 interest rates since the early 90, a Japanese who retired in 1989 would be in a world of hurt with Nikki dropping from 39K to 7,500. The slightly better news is a 30 year retiree would have seen the Nikki raise from 5K to 7500.
I am not sure how a bond portfolio would have performed during the same time period but I suspect it isn't great since interest rates were down.
I think the only hope for a Japanese retiree was to switch from an aggressive 80/20 equities portfolio and than switch to 50/50 portfolio in 89 or 90. I.e. perfect market timing is the remedy for all bear markets