More Gummy Calculators by JWR1945

Research on Safe Withdrawal Rates

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More Gummy Calculators by JWR1945

Post by JWR1945 »

More Gummy Calculators by JWR1945

I have made my Gummy 03 and Gummy 04 calculators available for downloading in the Special SWR Research section. You get to this section from a link on the left hand side of the NFB home page.

The Gummy 02 calculator introduced two new withdrawal algorithms. One works on a portfolio's current balance. The other works on a portfolio's initial balance.

The Gummy 03 calculator contains all of the features of the Gummy 02 calculator, but it replaces Professor Shiller's S&P500 stock data with Gummy's data for 1928-2000.

The Gummy 04 calculator is similar to the Gummy 04 calculator. But it replaces the commercial paper data with Gummy's new data for 1928-2000. It replaces Professor Shiller's S&P500 stock data with Gummy's new data for 1928-2000.

Gummy's data lists total returns for eight investment types:
1) Large Cap Growth
2) Large Cap Value
3) Small Cap Growth
4) Small Cap Value
5) S&P500
6) Treasury Bills
7) 5-Year Treasury Notes
8') Government Long Bonds

I allow you to adjust the weights to make any combination of these securities together. I include separate weights for the stock replacement data and for the commercial paper replacement data.

Data remain unchanged before 1928.

Gummy's S&P500 data differ from Professor Shiller's S&P500 January data. I believe that this is caused by differences in the day of the year chosen when calculating investment returns from different sources.

At first glance, it appears that Gummy's data produces results that are more optimistic than Professor Shiller's data, but only slightly so.

Comparing Historical Surviving Withdrawal Rates using Gummy's data with 80% stock portfolio to the previously existing data shows that Gummy's rates are slightly higher. Using the S&P500 from Gummy 03 calculator increased the rate at first failure from 4.0 to 4.1%. [This is with 0.20% expenses and withdrawals split 50-50 between the beginning of a year and the end of the year.] Using the S&P500 data from the Gummy 04 calculator and the Treasury Bill data (instead of commercial paper) increased this to 4.4% (or was it 4.3%?).

[I made these comparisons for 30-year Historical Surviving Withdrawal Rates for portfolios begun in 1928-1980.]

BTW, this means that we will now be able to give Mike better answers regarding Small Cap Value investments.

Have fun.

John R.
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