Author Topic: Challenge the 4% Rule  (Read 446 times)

Acastus

  • Bristles
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Challenge the 4% Rule
« on: June 10, 2019, 12:52:28 PM »
I found a few articles about dynamic withdrawal rates, decision based asset allocation in retirement, and started reading "Living Off Your Money, ..." by Michael McClung. All these strategies aim to spend at higher than the 4% rule, up to +1% overall, by using decision trees that examine your returns to date and market performance in the near past to choose a withdrawal amount each year.

Are there other books to read that are more mainstream? What I have read so far seems a little untried, just theoretical.

RWD

  • Magnum Stache
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Re: Challenge the 4% Rule
« Reply #1 on: June 10, 2019, 01:05:49 PM »
Have you read this Mad Fientist post?
https://www.madfientist.com/safe-withdrawal-rate/

MDM

  • Walrus Stache
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Re: Challenge the 4% Rule
« Reply #2 on: June 10, 2019, 04:09:33 PM »

Acastus

  • Bristles
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Re: Challenge the 4% Rule
« Reply #3 on: June 12, 2019, 02:50:09 PM »
Yes, I have read some Bengen,  the original Trinity study, and several reviews of the 4% rule. McClung uses it as a basline case to compare other withdrawal strategies. Some, notably the 2 and 3 bucket method, glidepath, and 100-age in stocks perform poorly in his analysis. Others do better than the default case of 50-60% stock with rebalancing.

I also saw a dynamic spending technique at Vanguard. This looks pretty basic, and I would like to read something more academic:

https://vanguardblog.com/2017/09/07/how-to-put-a-dynamic-retirement-spending-strategy-in-place/

2Birds1Stone

  • Walrus Stache
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Re: Challenge the 4% Rule
« Reply #4 on: June 12, 2019, 03:05:33 PM »
McClungs book is excellent. ERN did an analysis on the strategy as part of his SWR series. Highly recommend you read that series if you haven't done so already.

https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/

Acastus

  • Bristles
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Re: Challenge the 4% Rule
« Reply #5 on: June 14, 2019, 01:35:59 PM »
2Bird, thanks I will take a look at ERN.