daylatedollarshort
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Feb 19, 2013
- Messages
- 9,358
Actually no, I had not read the article, because it had nothing to do with my question to you. I was questioning your pointing out that "... the 4% rule which Bill Bengen himself keeps changing year to year - ...". As if him changing it (year to year?) reflects at all on the tool?
I just skimmed the article, but the "starting point paradox" is only an "apparent" paradox. It isn't a paradox at all once you understand how to read the data. It really doesn't matter how many people bring it up, it's not actually a paradox. The number of times it is brought up only reflects that is can be a little hard to get one's head around. It took me some effort to get there.
And from my skim, I think the authors point this out.
Maybe I'm just misunderstanding where you are coming from. It sounds to me like you are saying the tool contradicts itself, and is therefore of questionable value. But it really does not, once you understand it. It's value is exactly what it is and all it can be - to show how a given portfolio and spend pattern would have survived with the historical data it has.
-ERD50
The authors defend the starting point paradox using the 4% rule to explain the paradox. But Bill Bengen himself has abandoned ship on the 4% rule. My comment was on the article, so it is illogical to ask why I brought up the 4% rule when I commented on an article based on the 4% rule. You say there is no starting point paradox and repeatedly point to my lack of understanding and try to personalize and demean my comments over what is simply a basic logic issue that others have noticed as well, and discussed without any input from me.
Google the starting point paradox. I didn't invent the paradox, I just noticed it and didn't know it had a name until now. It is discussed in numerous places online. You can agree or disagree with the apparent paradox as you want, but it would probably be more helpful if you stuck to math and logic reasons of why you agree or disagree, and left my motives, agendas and your perceptions of my lack of understanding out of it, because none of those starting point paradox discussions have anything to do with me personally. It is just something I have observed as well as others, like Kitces discusses it here - https://www.kitces.com/wp-content/uploads/2014/11/Kitces-Report-May-2008.pdf
And, "The DMSWR (named after the authors’ initials, plus the acronym for safe withdrawal rate) addresses two commonly cited shortcomings of the 4 percent rule. First, it addresses the starting point paradox (Kitces 2008) by ensuring that initial retirement incomes are stable regardless of the precise retirement date and short-term fluctuations in the stock market." - https://www.financialplanningassoci...-retirement-income-harmonizing-drawdown-paths
It would also be helpful if you are replying to a comment on an article, that you read the article before criticizing the comment.
Last edited: