The Trinity Study (Table 1) had an 88% success rate for an 8% withdrawal over 20 years (non-inflation adjusted withdrawals at 50/50 stock/bond mix). If you only need to cover 20 or so years, those are pretty good odds.
I'm not sure I'd want to bet on the non-inflation adjusted success rate. Table 2 is inflation adjusted and gives a 43% success rate for the 20 years at 8% with 50/50 mix.
I'm not sure I understand. Why would you not bet on non-inflation adjusted success rates? Do you think the authors somehow messed up the research when they didn't include inflation? If you trust Table 2, you should trust Table 1. Claiming that one is more accurate than the other doesn't make much sense to me.
Using the non-inflation adjusted rate means that you won't increase spending with inflation. Someone who retired in 1990 might find it hard to make it on the same dollar amount today since a 1990 dollar is worth about $0.55 today. The math is good, it just doesn't reflect reality.
I'm aware we're talking about non-inflation adjusted withdrawals, noted it in my original post, and fully understand what that means. But the statement above by RWD seemed to question the
success rate of non-inflation adjusted withdrawals, which is what I didn't understand. Questioning whether one could live on non-inflation adjusted withdrawals is a wholly separate question from the success rate of the model for determining withdrawal rate for non-inflation adjusted withdrawals.
Setting that aside, I still think you could make a reasonable argument for non-inflation adjusted withdrawals over a couple decade time period. While a 1990 $1 is only $.55 today, food prices are pretty steady and may have even declined. Most of that inflation is driven by consumer goods, so if you buy those used, and use them sparingly, I think you wouldn't realize a decline of 45% in purchasing power. My guess is closer to 20%. Add to that the fact that most people spend less as they age, and I think it's fairly reasonable to for people with short time frames and full social security payments to give it a go at a high, non-inflation adjusted withdrawal rate.
Plus it gives them a chance to complain that they're on a fixed income, and what senior citizen would give up the chance to complain about that? j/k
I realize it's not relevant to those of us looking to FIRE in their 40s or 50s, as inflation would kill us over 50+ years without those adjustments, but for those that are older and have shorter periods to plan for, it's not a terrible idea.