A Question for John Greaney

[hocus]

John:

You say (wrongly) that a 4 percent withdrawal rate is safe for a retirement beginning today. What withdrawal rate do you say is unsafe for a retirement beginning today, according to the historical data?

Is a 5 percent withdrawal safe or unsafe, according to your research?

Is a 6 percent withdrawal safe or unsafe, according to your research?

Is a 7 percent withdrawal safe or unsafe, according to your research?

Rob

[intercst]

John:

You say (wrongly) that a 4 percent withdrawal rate is safe for a retirement beginning today. What withdrawal rate do you say is unsafe for a retirement beginning today, according to the historical data?

Is a 5 percent withdrawal safe or unsafe, according to your research?

Is a 6 percent withdrawal safe or unsafe, according to your research?

Is a 7 percent withdrawal safe or unsafe, according to your research?

Rob

An inflation-adjusted withdrawal rate of 4% (from a diversifed equity/fixed income portfolio) survived every 30-year period from 1871-2002

A withdrawal rate of 5% failed failed 24% of the time

A withdrawal rate of 6% failed failed 50% of the time

A withdrawal rate of 7% failed failed 67% of the time.

Hocus's current retirement plan of taking a 10% withdrawal from a 100% fixed income portfolio did not survive any 30-year period in history.

If you want to check the arithmetic, see link:

http://www.retireearlyhomepage.com/re60.html

intercst

[ogrecat]

John:

You say (wrongly) that a 4 percent withdrawal rate is safe for a retirement beginning today. What withdrawal rate do you say is unsafe for a retirement beginning today, according to the historical data?

Is a 5 percent withdrawal safe or unsafe, according to your research?

Is a 6 percent withdrawal safe or unsafe, according to your research?

Is a 7 percent withdrawal safe or unsafe, according to your research?

Rob

http://www.passionsaving.com/how-to-sta ... money.html

The most frequent question I am asked when giving money management advice is ?How do I get started saving money?? I?ve learned that the best way to get aspiring savers started is with the wonderfully simply but wonderfully powerful Multiply-by-25 Rule.  :o

[intercst]

While we're on the subject of withdrawal rates, readers might be interested in voting in our special 'Father's Day' poll.

http://www.retireearlyhomepage.com/fathersday.html

intercst

[hocus]

Thanks for your response.

Rob

[DRiP_Guy]

What withdrawal rate do you say is unsafe for a retirement beginning today, according to the historical data?

Rob

An inflation-adjusted withdrawal rate of 4% (from a diversifed equity/fixed income portfolio) survived every 30-year period from 1871-2002

A withdrawal rate of 5% failed failed 24% of the time

A withdrawal rate of 6% failed failed 50% of the time

A withdrawal rate of 7% failed failed 67% of the time.

Hocus's current retirement plan of taking a 10% withdrawal from a 100% fixed income portfolio did not survive any 30-year period in history.

intercst

A classic!

(and still relevant, and still true -- I suspect if updated with data to include up to 2013, those failure rates would not budge much at all.)

[DRiP_Guy]

Not updated for 2013 yet, but from intercst's data -

Year      2012 update
1994 Retiree (portfolio start value $100K, WR = 4% inflation adjusted)

Harry Dent Portfolio             ?$437,455
Harry Browne Portfolio      $388,833
Warren Buffett Portfolio      $375,001
One Fund 60%/40%       ?$247,883
75% S&P500/25% FI       ?$244,461
MPT Portfolio                   ? ?$221,658
Larry Swedroe Portfolio      $208,953
100% Fixed Income       ?$113,296


Which of those most closely approximates your own real-world portfolio over that period, Rob?

No matter what, it still looks like 4% did the job.

[DRiP_Guy]

Not updated for 2013 yet, but from intercst's data -

Year      2012 update
1994 Retiree (portfolio start value $100K, WR = 4% inflation adjusted)

Harry Dent Portfolio             ?$437,455
Harry Browne Portfolio      $388,833
Warren Buffett Portfolio      $375,001
One Fund 60%/40%       ?$247,883
75% S&P500/25% FI       ?$244,461
MPT Portfolio                   ? ?$221,658
Larry Swedroe Portfolio      $208,953
100% Fixed Income       ?$113,296


Which of those most closely approximates your own real-world portfolio over that period, Rob?

No matter what, it still looks like 4% did the job.

bump for answer
(Rob, if you are still banned here, you have your own blog to respond at)

[Yipee-Ki-O]

Come on hocus, how 'bout some Free & Open Honest Posting? about your personal SWR experience here or at the Plop? Or is it just to skeery for you to be free, open and honest about your withdrawal rate given that you suffered a failed attempt at early-retirement due to insufficient savings, a limited understanding of arithmetic, and a half-a$$ed financial plan. Good thing you had that inheritance and/or a working wife to make Safe Withdrawal Rates irrelevant to the hoco-retirement plan!

[Yipee-Ki-O]

Still mum about your personal withdrawal rate, huh hocus? I guess it matters not to the mentally ill internet troll Rob "hocus" Bennett given that his financial needs are met through an inheritance and/or a working spouse.