@Parametric Censorship there's a case to be made that a person with a portfolio too small to retire on, and with limited income to grow that portfolio organically, could have spent the last 25 years just waiting for the next crisis to hit. After the dot-com bubble, after the GFC, and in the midst of the COVID correction would have all been great times to buy - probably good enough to support a 5% WR for 30y, but all the numbers aren't in yet.
The U.S. in particular has become a lot less stable than it was in prior decades. The 1999 repeal of the Depression-era Glass-Steagall Act allowed banks to mingle their investing and lending funds, which means deposits tend to chase the latest investment fad and lending gets cut back when investments do poorly - a pro-cyclical feedback mechanism. Most of the reforms introduced after the GFC, such as the Dodd-Frank bill, have been steadily watered down. Meanwhile, the increasing share of the economy that is devoted to services - most of which are discretionary - means layoffs are more pro-cyclical than in the past. The decline of traditional journalism and the rise of social media mean that corruption is less likely to be rooted out, tribal hatred is on the rise, and people are making worse decisions based on lower-quality information. The deaths of a million Americans from COVID amid conspiracy theories might be just the start of our descent into idiocy. Then there are the volatility-increasing effects of the national debt and deficits, the decline of the middle class, student loan burdens, and subsidy-driven boom-bust cycles in housing. The unaffordability of housing and higher education is leading to demographic graying, which means fewer workers supporting more non-workers, and increased reliance on cyclical investments.
If anything, it appears that we're moving in the opposite direction of stabilizing things. People are doubling down on getting their info from podcasters and YouTube/TikTok influencers rather than subscribing to journalists, despite watching people literally die from accepting internet info. A coup was attempted in the U.S. just last year, and more attempts are in the works. Meanwhile, housing prices are well beyond sustainable levels even as interest rates are rising and nobody is doing anything about any of this stuff. Our best hope of stabilization might be for a new cold war to unite people around certain realities, and that's the best longshot we have.
So, why not hang out in short-term bonds or gold and wait for the next major correction to dive into stocks and retire on a 5% WR? One reason might be that, contrary to expectations, the next crisis/opportunity might not come around for a half-dozen years or more, by which time a person riding the markets' waves would probably have retired earlier than the person waiting for a CAEY that supports a 5% or 6% WR.
