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Old 10-22-2016, 10:22 AM
 
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yep
thats the one I used
thanks
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Old 10-23-2016, 05:52 PM
 
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mathjak-on fidelity

in the section that shows your numbers it has dropdowns for
Show Me: and In This Market:

i just realized the default is "significantly below average" and the other choices are below average and average...
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Old 10-23-2016, 06:13 PM
 
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i only use worst case . that equates to a 90% success rate if you clear it. that is close to 100% in firecalc.
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Old 10-23-2016, 06:26 PM
 
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Quote:
Originally Posted by mathjak107 View Post
i only use worst case . that equates to a 90% success rate if you clear it. that is close to 100% in firecalc.
"use only worst case"

lol

i knew you were going to say something to that effect...
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Old 10-23-2016, 06:27 PM
 
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well , the whole idea is to stress test your plan to see if it could at least get through the worst of the past . you can always give yourself raises along the way . changing your life style later with pay cuts is a lot harder if you plan the other way .

good planning does not rule out the awe crap's in life , it plans for it allows for it .
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Old 10-23-2016, 06:29 PM
 
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Quote:
Originally Posted by mathjak107 View Post
well , the whole idea is to stress test your plan to see if it could at least get through the worst of the past .
right but theres been no time where a 40 year timeframe has returned "significantly below averages"
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Old 10-24-2016, 03:05 AM
 
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good question : and the answer is :

the common denominator to every worst case scenario with NO exceptions is they failed because the first 15 years sucked .

even the group that retired in 1966 were the worst out of all the failures because the first 15 years were so bad that even being part of the greatest bull market in history could not save them . they were depleted to far down during the first 15 years . the 30 year returns looked just fine but not when spending down . sequence risk is the biggest factor . the exact same average return can have a 15 year difference in how long that money will last just depending on the order of the gains and losses and inflation .


every worst case had pretty decent 30 year records . nothing out of the ordinary , but it was the sequence risk the first 15 that did every one of them in .

here are the actual numbers :

suppose you were so unlucky to retire in one of those worst time framess ,what would your 30 year results look like :

1907 stocks returned 7.77% -- bonds 4.250-- rebalanced portfolio 7.02- - inflation 1.64--

1929 stocks 8.19% - - bonds 1.74%-- rebalanced portfolio 6.28-- inflation 1.69--

1937 stocks 10.12 - - bonds 2.13 - rebalanced portfolio -- 7.24 inflation-- 2.82

1966 stocks 10.23 - -bonds 7.85 -- rebalanced portfolio 9.56- - inflation 5.38

for comparison the 140 year average's were:

stocks 8.39--bonds 2.85%--rebalanced portfolio 6.17% inflation 2.23%

so what made those time frames the worst ? what made them the worst is the fact in every single retirement time frame the outcome of that 30 year period was determined not by what happened over the 30 years but the entire outcome was decided in the first 15 years.

so lets look at the first 15 years in those time frames determined to be the worst we ever had.

1907--- stocks minus 1.47%---- bonds minus .39%-- rebalanced minus .70% ---inflation 1.64%

1929---stocks 1.07%---bonds 1.79%---rebalanced 2.29%--inflation 1.69%

1937---stocks -- 3.45%---bonds minus 3.07%-- rebalanced 1.23%--inflation 2.82%

1966-stocks minus .13%--bonds 1.08%--rebalanced .64%-- inflation 5.38%

it is those 15 year horrible time frames that the 4% safe withdrawal rate was born out of since you had to reduce from what could have been 6.50% as a swr down to just 4% to get through those worst of times.

Last edited by mathjak107; 10-24-2016 at 04:13 AM..
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Old 10-24-2016, 05:50 AM
 
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Not sure where you're getting your numbers

i just looked back on one of them..

the 15 year period for the s and p 500 starting in 1966 was about 8% not -1

maybe i dint understand your point
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Old 10-24-2016, 06:49 AM
 
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those are real returns not nominal . it is real returns that count when spending down . you had almost 6% inflation . stock returns were 6.70% cagr and average was 8.26%.

real returns were at a slight loss .

Last edited by mathjak107; 10-24-2016 at 07:54 AM..
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Old 10-24-2016, 10:37 AM
 
Location: Central Massachusetts
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You realize you guys could have taken that whole discussion into PM/DM and the rest of us could take a nap.
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