Author Topic: Stop worrying about the 4% rule  (Read 112695 times)

farfromfire

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Re: Stop worrying about the 4% rule
« Reply #700 on: March 12, 2017, 06:17:48 PM »
The idea of being able to depend on drawing 4% from a risky investment portfolio thru retirement always seemed like the dumbest thing in the world to me.  One retires at 65. If you're lucky you make it to 90, so 25 years.  Putting $1M in a checking account and withdrawing $40k every year is guaranteed to make it till 90.  There is inflation, so investing the $1M in something like TIPs would allow for the inflation increases needed at last till 90, so why in the world would I put my money in a crazy fluctuating market to try and accomplish the same thing spending?

Now that my idea of retirement is not set at 25 years or less...and the 4% withdraw can continue to work for all these additional years, it finally became interesting.
That's a pretty novel idea for a forum focused on early retirement. Please, enlighten us further...


On another note, this thread converted me to mustachianism - many thanks to all of the contributors!

mathjak107

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Re: Stop worrying about the 4% rule
« Reply #701 on: March 13, 2017, 02:38:44 AM »
tips track a price index not your personal cost of living . the difference you see and what the cpi see's are as different as night and day and tips can leave you well off the mark .

in fact right now inflation expectations are high and tips are doing worse than conventional bonds because raising rates can reign in inflation and diminish your return which you may actually need more of .

the cpi is not really a cost of living index . it is a price change index on a basket of goods and services representing the 1500 mini economy's that make up this country and may have little in common with what you see  personally  in your personal cost of living index .

a personal cost of living index is unique to you , your age ,your location , spending patterns  and lifestyle . not what tips are linked to .

equity's have beaten inflation since the 1970's by over 7%  on average and continue to beat it over the longer term . .
« Last Edit: March 13, 2017, 02:43:27 AM by mathjak107 »

Monkey Uncle

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Re: Stop worrying about the 4% rule
« Reply #702 on: March 13, 2017, 04:27:52 AM »
I think you guys missed Strick's last sentence.
"Take this job and shove it" - David Allan Coe

farfromfire

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Re: Stop worrying about the 4% rule
« Reply #703 on: March 13, 2017, 05:01:47 AM »
Specific words, sentences and ideas in a post can be critiqued, especially when they describe separate ideas. Or is one only allowed to respond to the last sentence?

[mathjak107 is a kinder soul than I and responded to the point. In this forum, both glides and reverse glides for post-retirement have been discussed in great detail, dismissing the "dumbest thing in the world" to Strick]

Though bananas are tasty, banana-flavored food is often not tasty at all.

Monkey Uncle

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Re: Stop worrying about the 4% rule
« Reply #704 on: March 14, 2017, 04:41:46 AM »
Specific words, sentences and ideas in a post can be critiqued, especially when they describe separate ideas. Or is one only allowed to respond to the last sentence?

[mathjak107 is a kinder soul than I and responded to the point. In this forum, both glides and reverse glides for post-retirement have been discussed in great detail, dismissing the "dumbest thing in the world" to Strick]

Though bananas are tasty, banana-flavored food is often not tasty at all.

Well, I guess Strick can chime in to defend him/herself, but I believe you are still missing the point of his/her post.  The entire point of the post is contained in the last sentence.  He's "seen the light," and is now saying he no longer subscribes to the ideas detailed in the first paragraph.
"Take this job and shove it" - David Allan Coe