REWahoo! said:
If you look at my posts in this thread, you will see that I am not arguing the wisdom of increasing withdrawals as I agree that the prudent thing to do is to err on the conservative side. My point was and is that the statement, "Resetting upward requires resetting downward also, eliminating the year to year stability in withdrawals" is not accurate.
It may be the safe, conservative, and wise approach, but it isn't "required".
Well, it just seems counterintuitive to me. Lets try two examples, Abe and Bill, 5 years into retirement, both started with the same profile in Firecalc:
Abe has seen his NW increase. He runs FireCalc again and it indicates he can increase his SWR for the same success %.
Bill has seen his NW decrease. He runs FireCalc, and despite 5 years less life expectancy, it indicates that he needs to lower his SWR.
So we are saying that it is OK for Abe to adjust (maybe partially) up, but Bill does not need to adjust down?
I'm pretty sure the argument is that Bill must have hit that bad streak in the market, and anything that bad is past history for him, so he will be OK with his initial SWR. After all, that is what Firecalc was for, to get you through the bad times (assume you used a very high success rate). Running Firecalc again just repeats that bad streak for him. Double Whammy!
And the argument for Abe is that, rerunning Firecalc again includes that bad streak in the market, so the higher number does represent a new SWR for him.
Seems reasonable, but as free4now states, it all is dependent on that dataset. I guess some middle ground position makes sense.
-ERD50
PS - The real 'problem' as I see it is that as FIRED people, we probably are a group that were 'in control'. And we cannot control future markets , inflation, etc. It just makes us crazy