Author Topic: Stop worrying about the 4% rule  (Read 644009 times)

dougules

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Re: Stop worrying about the 4% rule
« Reply #1750 on: July 09, 2019, 11:12:18 AM »
I've just been listening to this book bu Douglas Brinkley, "American Moonshot."  He gives the impression that Von Braun arranged to surrender to the Americans.  Looks like he figured he might get more humane treatment, which he did.  He notes the Stalin was not happy when the Americans got the Von Braun crew.

The Russians had 27 million of their people die in World War 2.  I guess he did the math.

Yeah that was quite a gamble because it was illegal to employ Nazi's. It was under the secret plan to whitewash war records called operation paperclip that he didn't get thrown in prison or hanged along with the other Nazis at Nuremberg.

Interestingly I note the question on my citizenship question this last year.. "have you been associated with the Nazi party in Germany between 1939 and 1945?".

The smart ass in me wanted to say.. "No, but the US Government has"...:)

That gamble paid off.  They were treated like local heroes here.  I guess people forgot they had been Nazis when the Cold War and the space race heated up.  We actually bought our rental house from the widow of one of the folks on his team. 

Exflyboy

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Re: Stop worrying about the 4% rule
« Reply #1751 on: July 09, 2019, 12:28:22 PM »
I've just been listening to this book bu Douglas Brinkley, "American Moonshot."  He gives the impression that Von Braun arranged to surrender to the Americans.  Looks like he figured he might get more humane treatment, which he did.  He notes the Stalin was not happy when the Americans got the Von Braun crew.

The Russians had 27 million of their people die in World War 2.  I guess he did the math.

Yeah that was quite a gamble because it was illegal to employ Nazi's. It was under the secret plan to whitewash war records called operation paperclip that he didn't get thrown in prison or hanged along with the other Nazis at Nuremberg.

Interestingly I note the question on my citizenship question this last year.. "have you been associated with the Nazi party in Germany between 1939 and 1945?".

The smart ass in me wanted to say.. "No, but the US Government has"...:)

That gamble paid off.  They were treated like local heroes here.  I guess people forgot they had been Nazis when the Cold War and the space race heated up.  We actually bought our rental house from the widow of one of the folks on his team.

Yes it did.. There was a great program on last night about the space race. They said that Von Braun was a bit of a PITA to the US Government.. A bit of an attention seeking prima donna with a VERY sketchy past. He might not have actually beaten the prisoners to death himself but he sure as hell knew it was happening.

Personally I would have strapped him to a metal chair under the first Saturn V rocket and had the local Rabbi press the launch button.. But thats just me..:)

lutorm

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Re: Stop worrying about the 4% rule
« Reply #1752 on: September 08, 2019, 02:13:42 AM »
Having plowed through 1750 posts in this thread over the last week, I now have a much better understanding of the "4% rule". Thanks everyone who's contributed!

My personal reflection on the questions and misunderstandings around the rule is that when you're dealing with probability and statistics, it's very important to be very clear about what question you are asking. A while back someone asked about the apparent contradiction about retiree A and B where A started one year and B started the year after when the market had dropped and why retiree A could withdraw more money than B.

The way I like to think about it is that you don't have a 95% chance of a 4% withdrawal rate succeeding. What the analysis said is that out of all starting years, 95% of the years succeeded. So, assuming the future is substantially the same as the past, if you retire at a random year in the future you have a 95% chance of picking a year that succeeds. But you retire in a single, specific year, and your retirement either will or will not succeed. It's not random, you just don't know which the outcome is going to be yet.

But, when you start saying things like "retiree B retires after a 20% market drop", you've explicitly conditioned your question and the answer is no longer that 95% of the years would succeed, because most of those years didn't start with a 20% drop. You'll have to restrict yourself to the situations in the past that match your condition (if there are any, there's not much data and I suspect you'll quickly run out of data if you start matching on other variables.)  The same applies to any other present-day knowledge you are attempting to condition on, like the CAPE someone mentioned, inflation rate, whatever.

So when people are saying "I'm going to go with a 3% WR because valuations are so high", or whatever, it seems they should calculate what the SWR for the years in history that match that condition. Or, "I'm going to go with 6% because I can lower my expenses by 25% if (condition is fulfilled)", or "because I'm getting x$ in SS in 15 years." Those hypotheses are all testable against the historical data. I agree that flexibility in expenses and income are crucial for peace of mind, but assuming that the data exists it seems much better to actually calculate what the expected results are than to just handwave and assert that it should be fine.

Anyway, just my impressions from all this reading. Thanks again everyone.

2Birds1Stone

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Re: Stop worrying about the 4% rule
« Reply #1753 on: September 08, 2019, 05:07:13 AM »
I would recommend this post by big ERN.

https://earlyretirementnow.com/2018/07/25/why-is-retirement-harder-than-saving-for-retirement-swr-series-part-27/

It's not all rainbows and unicorns like some people would like you to believe.

kenmoremmm

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DadJokes

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Re: Stop worrying about the 4% rule
« Reply #1755 on: November 06, 2019, 02:12:03 PM »