No. of Recommendations: 2
Hi all – relatively new to thinking in depth about safe withdrawal rates and have read a fair amount on this and on other MF boards about the topic – one thing I never see addressed is how to factor in the die approaching poor factor…in other words – if x% withdrawal rate gives me x% chance of outlasting my money….doesn't that mean if I use x% as my SWR that I'm likely to die with a hefty amount on the table? What if I wanna leave little to nothing – no kids and have set aside enough to take care of the kitties separately --- leaving it all to charity but not really interested in protecting principal so my charity gets a big chunk….any suggestion on how to factor this selfish attitude into one's planning? Tom

I got this from intercst (and I recommend you visit his site below), but the 4% SWR in a worst case scenario has about a 30 year length of payout if you increase it with inflation.

<snip>

If you look at all the 30-year holding periods since 1871 (130 years of data) for the S&P500, the worst 30-year period had an average annualized return of 5.13%, the best 30-year period had an annualized return of 13.40%. If we adjust those two figures for the actual inflation in each 30-year period examined, the returns drop to 3.35% and 10.40% respectively. Here's a link with more info.

http://www.retireearlyhomepage.com/nobond1.html

Historically bonds have returned less than stocks on average.

intercst
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