thepalmersinking
Recycles dryer sheets
- Joined
- Mar 29, 2015
- Messages
- 180
If the portfolio has dividends. Is the 4% rule still valid? Can the amount be adjusted upwards to get the same result.
Any backdated experience on whether this rule is valid anymore?
Sure. Enter your details into Firecalc, set a retirement period of 30 years, a portfolio mix with 60% equities, and use the "Investigate" tab to look for a spending level that will result in a 95% success rate. With my numbers, Firecalc gave me a spending level that actually resulted in a 95.7% success rate. This represented a WR of 4.02%.Any backdated experience on whether this rule is valid anymore?
tons of threads on this stuff, make a pot of coffee and get a pack of smokes, and run your numbers 25 different ways thru the fire calculator its fun take notes, u dont really need the coffee or the cigarettes but thats what i did,
Is the 4% rule still valid?
A useful thing I learned long ago: "To every complex problem there is a simple solution, usually wrong."It's not really a rule, so feel free to pick your own amount.
It's not really a rule, so feel free to pick your own amount.
4% is gross. You have to also remove management fees/costs if you are incurring those, I understand.
The Trinity study includes 1% fees I believe. Also, it actually was 4.5%.
Don't count on it! MIL died at 93 with lung cancer. Her RIF was down to $24000. Pretty close!If you smoke enough, you will die before you run out of money!
No fees considered in the Trinity study - it was pure indexes.
And the 4.5% was from a different study - SAFEMAX (Bengen). I don't believe this one considered fees either.
The only study I've seen that considered 1% fees was Pfau's work, and he came up with a much lower safe withdrawal rate also due to more pessimistic market outlook projected from recent market history.
I came across a very short, intelligent book called "The 4% Rule and Safe Withdrawal Rates In Retirement by Todd R. Tresidder". It convinced me that 4% rule may not work in the future. I'm hoping to retire next year, counting on 2%, to be very conservative.
I've read several books on retirement so far, this was the gloomiest but also convincing. As Yogi Berra said: "'It's tough to make predictions, especially about the future"' and I don't want any nasty surprises (running short of funds) in 20 years.
Any backdated experience on whether this rule is valid anymore?
https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/
is recent, complete, well-researched, and the real deal.
https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/
is recent, complete, well-researched, and the real deal.
uh, no. FIRECALC is a really cool tool but not to be confused with logic behind a plan for financial independence leading to early/retirement.it took me more than 1 evening to read it, doesnt firecalc runs these scenarios already . i put in my expected year soc sec will be gotten, and then i run it with zero soc sec