So I've punched in a scenario into the calculator and I'm curious on thoughts of greater minds on the data.
Scenario A: Floor spending $35,000, Ceiling $40,000 equals 99.1% success
Scenario B: Floor spending $35,000 and 4% Ceiling equals 99.1% success
1. Why is the success rate the same, my initial thought is that the success rate would be substantially lower due to large spending swings when the portfolio is growing.
2. The 4% ceiling allows numerous draw periods from 140,000 to 40,000 in upward markets.
3. Is it more important to look at the additional spending as an opportunity of additional compounding growth vs. spending the excess? The graphs look very similar.
Thoughts?
Cfiresim below:
Statistics
Success Rate
Avg. Portfolio at Retirement
99.13% $955,000
Ending Portfolio
Yearly Withdrawals
Total Withdrawals
Average: $1,208,922 $50,283 $1,508,477
Median: $1,112,516 $42,375 $1,325,140
St. Dev.: $600,411 $18,948 $426,038
Highest: $3,740,710 $145,640 $2,696,520
Lowest: $-75,889 $35,000 $1,053,200
Withdrawal Analysis
First 5 Years
Beginning Third
Middle Third
Final Third
Average: $40,188 $42,880 $51,500 $54,631
Median: $38,200 $39,046 $44,914 $46,068
St. Dev.: $5,303 $9,606 $19,132 $22,003
Highest: $66,598 $117,241 $145,640 $123,462
Lowest: $35,000 $35,000 $35,000 $35,000
Failures: 0 0 0 3
Dip Analysis
Portfolio Dips(cycles)
Max Dips(in a cycle)
Withdrawal Dips(cycles)
Max Dips(in a cycle)
Cycles dipped >10% below initial: 70 30 0 0
>20% below initial: 59 29 0 0
>40% below initial: 43 23 0 0
>60% below initial: 21 18 0 0
ndividual Dips
Portfolio Dip
Cycle Start / Dip Year
Withdrawal Dip
Cycle Start / Dip Year
Lowest Dip: $-75,889 1966/1990 $35,000 1876/1877
2nd Lowest Dip: $-60,909 1966/1989 $35,000 1876/1877
3rd Lowest Dip: $-16,342 1966/1988 $35,000 1876/1877
4th Lowest Dip: $6,251 1969/1993 $35,000 1876/1877
5th Lowest Dip: $23,340 1969/1992 $35,000 1876/1877