withdrawal rates and methodologies

[mrfeh]

Thought folks would be interested:

https://www.morningstar.com/article...etirement-spending-rate-for-the-decades-ahead

 

[pb4uski]

Would be more interested if the OP included a short synopsis of the link.

 

[MuirWannabe]

No, you wouldn’t be more interested. It’s just an article stating 3.3% is the new 4%. Cause expected future market returns for bonds and stocks will be lower. That’s the premise, which is sketchy and who knows. The rest of the article isn’t horrible but nothing new for this crowd.

 

[MissMolly]

...and the article was written in 2019 and talks about low inflation

 

[Dtail]

Not long before the 2.4%WR will be mentioned.

 

[Chuckanut]

Then there are the various Variable Withdrawal methods.

https://www.bogleheads.org/wiki/Variable_percentage_withdrawal

Variable percentage withdrawal (VPW) is a method which adapts portfolio withdrawal amounts to the retiree's retirement horizon, asset allocation, and portfolio returns during retirement. It combines the best ideas of the constant-dollar, constant-percentage, and 1/N withdrawal methods to allow the retiree to spend most of the portfolio using return-adjusted withdrawals. By adapting withdrawals to market returns, VPW will never prematurely deplete the portfolio.

The VPW method uses a variable (increasing) percentage to determine withdrawals from a portfolio during retirement. Each year, the withdrawal is determined by multiplying that year's percentage by the current portfolio balance at the time of withdrawal.
The VPW method and spreadsheets were collaboratively developed and improved by a group of Bogleheads®.[1]

The VPW Accumulation And Retirement Worksheet calculates variable portfolio contributions, during accumulation, and variable portfolio withdrawals, during retirement, while taking into account current and future pensions with and without cost-of-living adjustments.

 

[willing2try]

I've been hearing about this 3.3% is the new 4% thing for over 5 years now. Over that span my portfolio has averaged over 15% growth per year.

 

[AginMS]

And it wasn't that long ago Bengen said that by adding a third asset class, small-cap stocks, investors could safely withdraw as much as 4.5% annually.

 

[GravitySucks]

And it wasn't that long ago Bengen said that by adding a third asset class, small-cap stocks, investors could safely withdraw as much as 4.5% annually.

Also not long ago he said this is not the worst of times (though it was in The Before Times) so he is personally using 5%.