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Financial Independence/Retire Early -- Learn How!
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who made this statement?

Poll ended at Sun Aug 15, 2004 10:19 am

intercst
0
No votes
ataloss
0
No votes
hocus
0
No votes
William Bernstein
7
100%
 
Total votes: 7

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ataloss
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just for fun

Post by ataloss »

if you plan reasonable withdrawals (2-5% withdrawals of the original nest egg adjusted upward for inflation in each year) there is a small risk of disaster....
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Post by raddr »

I voted for Bernstein. IIRC he makes a good case for aiming at around 4% even if valuations suggests lower withdrawals would be prudent because too many things can go wrong on a macro scale (wars, irresponsible govt. policy, etc.) to worry about fine tuning things too much. Not bad advice, IMHO. :wink:
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Post by hocus »

I voted for Bernstein.

I voted for Bernstein too.

I would observe that Bernstein is referring to an indivudal investor's Personal Withdrawal Rate, which is not the same thing as the Safe Withdrawal Rate calculated pursuant to a SWR analysis. I get the impression at times that a failure to distinguish the two concepts causes a lot of confusion.

If we were talking about the Personal Withdrawal Rate (the percentage withdrawal that an investor takes from his stash each year), I would be in agreement with many of the points made by Ataloss. For example, I would agree that the PWR can be determined by reference to rules of thumb. And I would agree that one can properly calculate one's PSR by a subjective process.

The SWR, in contrast, is defined as a number calculated by an objective data-based calculation. The SWR is the highest take-out number that meets the condition of not causing the retirement to go bust in the worst-case scenario, presuming that the future is like the past.

The SWR can be used to help an investor determine his PWR. But the two numbers need not be the same and often are not the same.
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ataloss
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Post by ataloss »

LOL I didn't carch anyone with this poll. Hocus, in fact I did not discover this Bernstein quote in some exotic place it is right there along with the 2% figure on page 234! After saying that >2% withdrawals "may not be entirely safe." He goes on to mention "reasonable withdrawal rates" of 2-5% with inflation adjustment. If there is a failure to distinguish between your definition of swr and pwr, please take it up with the author of the book!!!!
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Post by hocus »

it is right there along with the 2% figure on page 234!

Once you are clear on the distinction between a SWR and a PWR, it all begins to make a lot more sense, doesn't it?
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ataloss
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Post by ataloss »

Once you are clear on the distinction between a SWR and a PWR, it all begins to make a lot more sense, doesn't it?


on the contrary, I reject the artificial distinction you are making

further see next thread Bernstein's "calculation" is classic rule of thumb
Have fun.

Ataloss
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