Firecalc use after market correction?

[youbet]

IF I am Good by firecalc (100%) and THEN the market downturn matches the worst case scenario that Firecalc was considering PRE downturn- then i should still be 100% okay- but firecalc is certainly going to still factor in the same worst case scenario- essentially DOUBLING the worst case!

You're a creative guy brainsagolfer but absolutely wrong in your understanding. FireCalc backtests scenarios vs historical data. The result of each beginning year is independent of the others. If your portfolio value input drops by 30% due to current market conditions, then FireCalc backtests with that lower number.

Don't try to read so much into FireCalc. Read the instructions. Drop the available spreadsheets and do some statistical analysis in Excel (or similar). FireCalc is just backtesting your scenario and will do it the same way whether your portfolio value number is what it is today or drops 30% tomorrow.

 

[Dtail]

But you can run a 1999-2017 cycle, and compare to other 18 year runs. My research says that 18 years in, the 1966 start year was way worse than a 1999 start year. Start with $1M and 4% spend:

1999 got to $675K in 2017
1966 got to $153K in 1984

-ERD50

Beat me to it- yes that's my reference despite not 30 years.

Will be interesting though that it is quite possible that the 1999 retiree will have 3 bear markets in their 30 year retirement and would they then qualify for worst time to retire.

 

[audreyh1]

Beat me to it- yes that's my reference despite not 30 years.

Will be interesting though that it is quite possible that the 1999 retiree will have 3 bear markets in their 30 year retirement and would they then qualify for worst time to retire.

Don’t jinx me!

 

[Dtail]

Don’t jinx me!

Right, sorry.....

 

[TwoByFour]

But you can run a 1999-2017 cycle, and compare to other 18 year runs. My research says that 18 years in, the 1966 start year was way worse than a 1999 start year. Start with $1M and 4% spend:

1999 got to $675K in 2017
1966 got to $153K in 1984

-ERD50

I think what you would really want to do is test all possible 13-year sequences with a starting value of $675k, which I have not done but I have got to believe will have 100% success.

 

[ERD50]

I think what you would really want to do is test all possible 13-year sequences with a starting value of $675k, which I have not done but I have got to believe will have 100% success.

Pretty close! Just one failure.

https://goo.gl/XdcD5n

-ERD50

 

[Retch The Grate]

Sure. One example can be found in the paper T. Guyton, Jonathan & J. Klinger,
William. (2006). Decision Rules and Maximum Initial Withdrawal Rates. I put a link in below, but if it does’t work, you can google it. Basically, it states that a failing retirement portfolio can be saved by using rubrics to adjust the spending rate. Of course, computer algorithms can do a better job today.

https://r.search.yahoo.com/_ylt=Awr...al_Rates/RK=2/RS=7Yyu0G8aEgqAfAlhYJAd75tKlx4-

Big ERN did a bunch of analysis on this, I posted links in the other withdrawal thread: https://earlyretirementnow.com/2017...-safe-withdrawal-rates-part-9-guyton-klinger/

TLDR: G-K and other variable withdrawal rate plans will have extremely large swings in the amount you can take a year. If the goal is to have the ability to consistently take the planned amount, you are better off with a lower withdrawal rate that you don't have to emergency adjust.

My personal plan, 3% of value when I retire + inflation each year, and at any point, I can recalculate that 3% when it is up higher than inflation. Historically that has 100% survival while capturing as much of the portfolio growth in immediate spending as is possible. Your goals may be different and you may make different choices, but that's where my research led me.

 

[Retch The Grate]

Karsten over at Early Retirement Now has a great series of articles on safe withdrawal rates.
https://earlyretirementnow.com/start-here/

Scroll down the index to articles on flexibility (Parts 23, 24 and 25)

Whoops missed you had posted the link already too.