FIRECalc HDBR50 and 80 Tables

Research on Safe Withdrawal Rates

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JWR1945
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FIRECalc HDBR50 and 80 Tables

Post by JWR1945 » Sat Mar 20, 2004 4:16 am

I put these tables together using FIRECalc as opposed to the Retire Early Safe Withdrawal Calculator (with and without my changes). I used the special version that allows one to specify the first year in the table.
http://early-retirement.org/fire/latestart.asp

These results are as close as possible to those reported in Misjudging Safety. http://nofeeboards.com/boards/viewtopic.php?t=2242

I set up FIRECalc for 1921-1980. I used a $100000 starting balance. I varied the initial withdrawal amount in increments of $100 (that is, in increments of 0.1%). I used the CPI to adjust withdrawal amounts to match inflation. I set the expense ratio at 0.20%. I looked at 30-year survivability. The portfolios were re-balanced annually at no cost. I left all other settings in their default conditions.

The main difference in these calculations has to do with how withdrawals are made. FIRECalc makes one withdrawal per year. The Retire Early Safe Withdrawal Calculator (under default conditions) splits the withdrawal into two parts, one at the very first of the year and the other at the very end of the year. [It can be set up to make withdrawals differently.]

Most of the time, the two calculators produce results that are almost identical. Sometimes, the results differ substantially.

HDBR50 consists of 50% stocks and 50% commercial paper. HDBR80 consists of 80% stocks and 20% commercial paper.

The tables are arranged according to P/E10. The values are the 30-year Historical Database Rates. The portfolios all had positive balances after 30 years at the withdrawal rates shown. They all had negative or zero balances when the withdrawal rates were increased by 0.1%.

Have fun.

John R.

HDBR50 and HDBR80 Ordered by PE10

Lowest Valuations


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Year  PE10  HDBR50  HDBR80
1921    5.1   9.6   11.6
1922    6.2   8.4   10.3
1924    8.0   7.9    9.5
1923    8.1   7.6    9.0
1933    8.7   5.8    8.4
1980    8.8   9.2   10.3
1975    8.9   7.0    8.3
1978    9.2   7.9    9.1
1979    9.2   8.4    9.5
1932    9.3   6.0    8.1
1925    9.6   7.3    8.4
1942   10.1   6.1    9.1
1943   10.1   6.3    9.2
1949   10.2   7.8   11.1
1948   10.4   7.7   10.9
1950   10.7   7.3   10.2
1944   11.0   6.1    8.6
1976   11.1   6.5    7.2
1926   11.3   6.9    7.7
1935   11.4   5.3    7.4



Middle Valuations


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Year  PE10  HDBR50  HDBR80
1947   11.4   6.8   9.4
1977   11.4   6.8   7.4
1951   11.8   7.1   9.4
1945   11.9   5.9   8.2
1954   12.0   6.9   9.0
1952   12.5   6.9   9.0
1934   13.0   4.8   6.3
1953   13.0   6.7   8.6
1927   13.1   6.6   7.3
1938   13.5   4.9   6.6
1974   13.5   5.6   5.9
1958   13.7   5.8   6.8
1941   13.9   5.0   7.0
1939   15.5   4.6   6.0
1946   15.6   5.2   6.7
1955   15.9   5.8   6.9
1940   16.3   4.6   6.1
1971   16.4   4.9   5.0
1931   16.7   5.1   5.6
1957   16.7   5.3   6.0


Highest Valuations

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Year  PE10  HDBR50  HDBR80
1936   17.0   4.4   5.5
1970   17.0   4.8   4.9
1972   17.2   4.8   4.8
1959   17.9   5.0   5.4
1956   18.2   5.2   5.9
1960   18.3   5.0   5.3
1961   18.4   5.0   5.3
1973   18.7   4.7   4.5
1928   18.8   5.7   5.8
1963   19.2   4.9   5.1
1967   20.4   4.5   4.5
1962   21.1   4.7   4.8
1969   21.1   4.3   4.2
1968   21.6   4.3   4.2
1937   21.6   3.9   4.6
1964   21.6   4.6   4.6
1930   22.3   4.8   4.8
1965   23.2   4.3   4.2
1966   24.0   4.2   4.0
1929   27.0   4.6   4.3

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