Quote:
Originally Posted by Garthur
Why is it so difficult to understand that any plan based on historical data is worthless now. We are in uncharted waters. All this talk about what happened for the past 100 to 150 years or so has no relevance today.

because you are incorrect if you read why . math never changes . the data only identify's the worst outcome's . in fact you don't need the historical data , that is what computer monte carlo simulations do . they try to find the worst case scenario's they can come up with and tell you what the bottom line number is for things to fail .
the safe withdrawal rate is based on the income not failing mathematically based on the worst conditions in the usa ever . as long as current math holds above the old low water mark we know we are fine.
all that data lets researchers extract the math that causes failure .
so we know that unless the outcome is much worse mathematically you are good to go in theory .
we would have to have a worse outcome then the data i posted above for 1966 . even those that retired in 1929 have not done worse .
but now because of those study's we know what our low water mark is before we run out of money or pass the danger point .
you may not understand how to utilize those numbers so to you , you are thinking it is based on market averages ,rates and inflation decades ago . but it really is not .
it is based on the most horrible outcomes we have had and the math behind why they ran out of money before they ran out of time and that math is timeless .
when you know what those numbers are it is easy to monitor the future and know if you are on track early on .
the take away from the study's and data is that going forward you need to maintain at least a 2% real return average over the first 15 years .
that is what the historical data all boils down to , that you called useless . if it wasn't for that data we would not know a thing about the mathematical common denominators of the failures so we know what to look for going forward to see if we are good to go or have to take a pay cut before it is to late ..
think of your blood pressure .... decades of study's have shown what a good range is . it doesn't matter that lifestyles were different , diets were different back then , even life expectancy was different but if every time they looked at a stroke victim and their pressure exceeded a certain point well despite the fact lifestyles , expectancy and diets change the smart thing is for you to stay below that number .
those past study's generated a number you can hang a hat on going forward as a guide . that number has nothing to do with what changed through the years. all that matters is you are above range or below .