Lsbcal
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Yes it is but many using this Excel file will only focus on the VPW sheet. Many do not want to explore the ins/outs of Excel. I had to spend some time to understand the relationships between sheets. Don't get me wrong though, you have done an excellent job on this.This data is shown in details on the "Path" sheet.
Good point as Cut-Throat has pointed out inflation to the retiree may be quite different then the CPI. But I do strongly feel I need to apply some sort of inflation adjustment after several years. I may be more sensitive to travel and medical inflation but much less sensitive to home and commute inflation. Tough to quantify.I personally think that looking at inflation-adjusted* data is misleading, because CPI is much more volatile than how inflation is felt by us. *(Even if the spreadsheet says "inflation", it's actually a CPI-adjusted amount. In economics, CPI is an indirect measure of inflation).
In the 1970's you would be getting 10% raises but the taxation was not inflation adjusted so you were pushed into ever higher tax brackets and/or your inflation raise was reduced a lot. This was by design. Government was getting a bigger share of the pie. You had to live this to appreciate it. I think modest inflation is OK now with inflation indexation of taxesMy salary is in nominal dollars. It doesn't adjust every month. While it adjusts yearly, adjustments sometimes lag CPI and sometimes are ahead of CPI.
I am just suggesting that it is easier on the viewer to not have to compare the red and blue lines. Maybe just add a line that shows how the spending is maintaining its buying power or not.What's important to worry about is the longer-term trend of the cost of living, and whether withdrawals are able to keep up with it. That's why the VPW spreadsheet shows both withdrawals (blue line) and the cost of goods that could be bought by the CPI-adjusted initial withdrawal amount (red line).
I revised the AA to be 50/50 (US stock/foreign stock/bond = 30/20/50). I now see that the 1975 portfolio is $759K nominal (or $499K CPI adjusted). Still seems to be a big hit to me. So somewhat worse numbers then you mention, not sure why. I think the real issue here is how much one wants to emphasize CPI adjustment numbers versus nominal. I'm still not convinced of the nominal argument.Going back to your example of a 1966 retiree. In nominal dollars, he never saw a 50% loss in his portfolio (or withdrawals). Actually, had he used a 50/50 portfolio, he would have barely seen any significant reduction in portfolio value before age 90, even while taking withdrawals all along. Starting with $1M, the lowest portfolio value was $830K in January 1975. Not so bad, psychologically!