This sounds very optimistic, but other than "drawdown", Mrs. Lincoln, how was the play? The 4% 1966 retiree with a balanced portfolio was barreling toward poverty as they approached age 80. Their stash depleted to only 20% of it's original real value. Yeah, things got progressively better and the stash lasted until age 95, but that's only known in hindsight. And many think that conditions of today mimic conditions that that led to that "great inflation" of the late '60's early '70's.Here are 3 notes I made when 1st researching the 4% rule:
* 4% handles the WORST historical scenario; 6.6% is the sustainable withdrawal rate based on average returns.
* Over 2/3rds of the time the retiree finishes the 30-year time horizon still having more-than-double their starting principal.
* The median wealth at the end – on top of the 4% rule with inflation-adjusted spending – is almost 2.8X starting principal.
So if your portfolio is increasing more than 4% (on average) and you're withdrawing 4%, you should have a lot left over. at the "end."
Again, I maintain that "drawdown" has been a key factor that's been overlooked by the "4% Rule" folks.
Statistics: Posted by Leesbro63 — Tue Jan 07, 2025 3:46 pm