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suppler and more sensible takes on SWR

this guy seems rather more sensible and suppler in his thinking than some other analysts


  • beebee
    edited March 2021
    Thanks @ davidmorn

    I am also intrigued by Pfau's & Kitces studies that suggest:
    In a world where the conventional wisdom is that retirees should reduce their equity exposure throughout retirement as their time horizon shortens, this research suggests that in reality, the ideal may actually be the exact opposite.
    if the portfolio is depleted too severely by withdrawals and bad returns in the early years, there won’t be enough (or any) money left for when the good returns finally arrive. And notably, the truly dire situations are not merely severe market crashes that occur shortly after retirement, but instead the extended periods of “merely mediocre” returns that last for more than a decade, which are far too long to “wait out” just using some cash and intermediate bond buckets. Conversely, when the equity glidepath is rising and the retiree adds to equities throughout retirement (and/or especially in the first half of retirement), then by the time the market reaches a bottom and the next big bull market finally begins, equity exposure is greater and the retiree can participate even more!
    I have often thought...
    Own retirement date funds (that have a glide path) towards initial retirement (your retirement date) and then re-cast these "retirement date " funds out over your retirement horizon in increments that maximize a SWR, Portfolio Duration (You do not want to have a chance of failing after only 10 years if you are planning for 50 years), and Terminal Value.

    Here's a link to Kitces discussion on the topic:
  • Excellent articles thank you for posting!

    Do wonder the models account for crazy investing manias which we def have now, potential huge war on our turf, we mess with the wrong folks we'd most def see missle rain on our turf or em pulse knocking out our infrastructure and regardless will we experience extreme socialism where we are headed, that won't be good for stonks

    I would think all bets are off and then the question will be can we cross borders with our wealth

    Also how much more impact will bitcoin have? Will it turn into the place to be or another investing farce?

    With advances in genetics do you need to push the curve out to 55, 60 years??

    Good health and good luck to all

    Baseball Fan
  • beebee
    edited March 2021
    I wanted to re-post some of the article's comments and additional links

    Rule Based Investing & Retirement Spending:

    Freeze Rule: In any year when the portfolio has shrunk due to market losses, we freeze the withdrawal amount, not taking any increase for inflation.
    Cut Rule: The withdrawal amount is cut by 10% if the withdrawal percentage grows to more than 20% above the initial withdrawal rate.
    Kitces calls these rules for withdrawals - Withdrawal Policy Statement (WPS):

    Guyton's Decision Rules:

    Applying Guyton's Rules to a $1M portfolio (Template):
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