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Old 07-30-2020, 09:04 AM   #21
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... Also Old Shooter points out that you get will have to review and course correct over time. Very important thing to keep in mind.
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Old 07-31-2020, 05:27 AM   #22
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Maybe consider a withdrawal method that exchanges SORR for Sequence of Income risk? That is, change the risk from prematurely running out of money to a method where each year's withdrawal is variable - meaning that there is always the possibility that any given year's withdrawal might be below what you need but at the same time there is a direct relation between the performance of your portfolio and the amount you can withdraw.

Anyway, there are many examples out there
- Something relatively simple such as withdrawing a fixed percentage of your portfolio and letting the long term returns of your portfolio take care of inflation. Mathematically this can never deplete your portfolio, though if your chosen percentage is too high, the size of your portfolio can asymptotically approach $0 over time.
- VPW which has a monotonically increasing withdrawal percentage each year. The actual percentages depend on your Asset Allocation and how many years you expect to be around. This can all be pre-calculated
- "Time Value of Money" which is VPW-like but also takes into account the NPV of any future cash flows like SS, or expected future lump sums, but also uses metrics to guesstimate future stock and bond fund returns, which tends to smooth out the withdrawals over time..
- More complex methods like floor/ceiling, Kitces Ratcheting, Guyton-Klinger and others.

Many, but not all, can be found on this site: https://www.bogleheads.org/wiki/Withdrawal_methods

Others can be found via google.

Cheers,
Big-Papa
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Old 07-31-2020, 09:26 AM   #23
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I say you're looking at all the right stuff -- lots of different ways to evaluate and develop a financial strategy.

But I also say you are in analysis paralysis and need to recognize that there is absolutely no way you can determine your individually optimum strategy. The only way to know that is to examine the alternatives and their actual results as of the day you die. None of these analysis approaches is or can ever be predictive.

So ... relax. Have a glass of wine and some nice cheese. Pick an approach and plan to re-evaluate it once in a while. Maybe once a year. Maybe once every two years. The world changes, you change, your needs and wants change, ... it goes on and on. You just have to accept that and realize that adaptation is still a way of life even after you've retired.
I agree with OldShooter that you should keep it simple and choose one plan. Your original plan should be fine, even taking into account SORR risk. If the markets crash and burn, you can always adjust your plan or withdrawal rate. Because you haven’t included SS in your analysis, you actually have a lot of financial flexibility.
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