But if you have figured how much you can safely withdraw and then the market reduces your portfolio by half, what do you do then? It depends.If you have correctly figured, using the well-researched and authoritative data & studies, then what you have "figured" better be about 4% annual withdrawal (of your initial account value) increased by annual inflation. Note: the 4% is used to compute the initial dollar amount, and never used thereafter. All future withdrawals are based on this dollar amount, regardless of fluctuations in portfolio value.The data in the studies accounted for the historical periods when the portfolio was hit by bear markets -- that's why the figure is 4% and not 8%.When the market reduces your portfolio by half, then you stay on the withdrawal path.It depends on if you believe in data and statistics.If you do, then you stay the course.If you don't, then you panic. 'course, people who don't believe in the statistics tend to "invest" in the lottery, so they never worry about the market anyway.I think when you are getting up there in age and can't afford to lose, then you need to have a goodly portion of your funds on the sidelines.Really? If you are 70-80 years old and are taking $100,000/yr from your $3,000,000 portfolio that is 66% stocks/33% bonds, and the stock portfolio drops from $2,000,000 to $1,000,000 -- leaving you with $1M in stocks and $1M in bonds -- you have big worries?
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