Author Topic: Challenge the 4% Rule  (Read 1973 times)

Acastus

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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

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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

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

Acastus

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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

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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

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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.

macmoneysaver

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Re: Challenge the 4% Rule
« Reply #6 on: September 14, 2019, 04:51:18 PM »
Quote
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/

@Acastus This link is no longer valid.  Are you aware of it in any other location?

CoffeeR

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Re: Challenge the 4% Rule
« Reply #7 on: September 14, 2019, 08:21:16 PM »
Quote
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/

@Acastus This link is no longer valid.  Are you aware of it in any other location?

From Google's cache: https://tinyurl.com/y3texpff

Acastus

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Re: Challenge the 4% Rule
« Reply #8 on: October 16, 2019, 02:58:35 PM »
Mac,

I did not save the original. This article is similar.

https://vanguardblog.com/2019/08/08/sustaining-retirement-income-in-a-lower-return-world/

Acastus


Quote
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/

@Acastus This link is no longer valid.  Are you aware of it in any other location?

grantmeaname

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Re: Challenge the 4% Rule
« Reply #9 on: October 19, 2019, 07:16:10 AM »
If you ever want to see a web page that has been taken down, check out the Internet Archive. Here is their archived copy of the original post.

chasesfish

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Re: Challenge the 4% Rule
« Reply #10 on: October 19, 2019, 07:29:10 AM »
@Acastus - Let me know what you think when you finish ERN's series.

He actually ran a custom SWR for me nearly two years ago which includes a pension and we came in just under 4%.  The equity glidepath discussion was specifically important