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Re: Bernicke "Reality Retirement Plan"
Every withdrawal in the standard (and Bernicke) scenario is adjusted for inflation, so your spending ability remains the same.
In the Bernicke paper linked in FIRECalc, he also showed future spending adjusted for inflation.
Then, he reduced the spending a bit each year starting at age 56 and going through age 75, when it winds up being something like half the original spending amount, and staying there.
So FIRECalc does the same. The only difference between the two is that in his paper, Bernicke assumed a standard rate of inflation, and in FIRECalc I use whatever the inflation rate was the year being modeled.
Keep in mind that the difference between success or failure can be as little as a dollar over a 30 uear retirement, and in most cases, retirement scenarios that are reasonable (but not quite successful as you might like) are generally failing in the last few years -- when the Bernicke model has you taking just half of what you originally started with.
Look at the chart on the right in the standard display and you'll see how many of the cycles ended up just a bit below zero. A spending reduction that cuts your later term spending in half can have a big effect.
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Often uninformed, seldom undecided.
Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover. Mark Twain
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