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Old 11-30-2016, 01:46 PM
 
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Ignore the Retirement Alarmists: The 4% Rule Is Imminently Safe -- The Motley Fool
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Old 11-30-2016, 05:13 PM
 
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Imminently or eminently?
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Old 11-30-2016, 05:22 PM
 
Location: Florida -
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This article reads like one of those general hypothetical or theoretical articles needed to fill one's column space at deadline. It seems to completely ignore the poor returns over the past 8-years, in favor of a longer 40-50-year trend. Real inflation (package downsizing and other more subtle influences) are also overlooked. Still, the 4-percent generalization is probably safe ... until it isn't. There is really nothing new or statistically incisive here to support the conclusion one way or the other.
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Old 11-30-2016, 05:38 PM
 
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Originally Posted by jghorton View Post
This article reads like one of those general hypothetical or theoretical articles needed to fill one's column space at deadline. It seems to completely ignore the poor returns over the past 8-years, in favor of a longer 40-50-year trend. .......
What poor returns over the past 8 years??? You really would have needed to make seriously poor choices not to have done well. In the past 8 years my portfolio has way more than doubled due to the excellent returns.
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Old 11-30-2016, 05:46 PM
 
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What poor returns over the past 8 years??? You really would have needed to make seriously poor choices not to have done well.
That's what I was thinking!
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Old 11-30-2016, 05:58 PM
 
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Originally Posted by jghorton View Post
There is really nothing new or statistically incisive here to support the conclusion one way or the other.

The 4% Rule has a 96% chance -- based on history -- of leaving you with more principal in your account 30 years after you retire. It's important to note that these are nominal, not inflation-adjusted dollars.
The median retiree, who uses the 4% rule to a tee, will have 2.8 times his/her starting principal after 30 years.
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Old 11-30-2016, 06:09 PM
 
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The 4% Rule has a 96% chance -- based on history -- of leaving you with more principal in your account 30 years after you retire. It's important to note that these are nominal, not inflation-adjusted dollars.
The median retiree, who uses the 4% rule to a tee, will have 2.8 times his/her starting principal after 30 years.
No. The data supporting the 4% rule supports a safe withdrawal rate of 4% inflation adjusted. In order to withdraw 4% inflation adjusted, all that is needed is a consistent investment return of 2% plus the rate of inflation.
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Old 11-30-2016, 06:14 PM
 
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Originally Posted by jrkliny View Post
No. The data supporting the 4% rule supports a safe withdrawal rate of 4% inflation adjusted. In order to withdraw 4% inflation adjusted, all that is needed is a consistent investment return of 2% plus the rate of inflation.
I just copied what was posted in the article...
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Old 11-30-2016, 06:39 PM
 
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yep , michael kitces numbers crunching shows you need to average 2% real returns over the first 15 years of a 30 year time frame ..

if you average much less the first 15 years no matter how good things get after that, all time frames have failed because of the first 15 years .
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Old 11-30-2016, 06:40 PM
 
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I just copied what was posted in the article...
The rate of inflation has averaged 3.5% over the past several decades. That means the cost of living will double approximately every 20 years. That means at the end of a 30 year retirement you would need to withdraw more than 3 times the initial amount to maintain the same standard of living.


If you want to look at this in more detail, I suggest looking at the Firecalc webpage which offers a free calculator and allows different withdrawal scenarios and which displays the results in a graphical form.


A few years ago Kitces and another talking head, named Pfau, were warning that the 4% rate would need to be reduced. Both of the gloom and doomers generated interest and publicity with their predictions. The past few years have again proven them wrong. No one can say for certain what the future will bring but the 4% rule has proven reliable based on worse conditions of the past hundred years including the Great Depression, the Dot Com bust, and the recent Great Recession. The worst possibility is related to what happens the first few years of retirement. If all hell breaks loose with negative returns and/or high inflation that might mean rethinking the withdrawal rate.
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