phooley and JAFO31:Thanks for your comments. I posted the link to Scott Burns. I haven't yet seen the comments on the retire early board but think I will go look at them later.I still say that Burns' point was not concern about a temporary loss of principal, but a 100% loss of principal. His backtesting simply determined what would have happened to a $100,000 portfolio if a fixed $7,000 were withdrawn each year (7% of the original portfolio). He based the results on actual market results for every fifteen year period going back for some time. He found that, in some cases, the portfolio would have dropped to zero. In another case, the portfolio would have grown to almost $1 million. He was merely pointing out that one could not guarantee a safe withdrawal of a fixed dollar amount from a portfolio each year if that dollar amount was 7% of the original portfolio. He then backtested using lower fixed amounts and discovered that, given historical returns, there is a safe fixed withdrawal rate that might have taken the principal down pretty far during the 15 year period, but would not have run it to zero before the end of the 15 years.I haven't said it as well as Burns did. It is obvious that no one would intentionally let their portfolio grow into the stratosphere if they needed the money, or for that matter merely wanted the money. And just as obviously, no one would stick to their fixed withdrawal amount if their portfolio had substantially decreased or increased. He was just pointing out that if you need $70,000 every year no matter what, you better have more than $1,000,000 on hand to start. IF returns equal what they have in the past, you might do fine with your $70,000 withdrawal on your $1,000,000 starting portfolio and even end up with nearly $10,000,000 after 15 years. The problem is that you might run yourself down to zero if you hit a sustained bear market. All of this discounting inflation, of course, which you absolutely cannot discount.WiseNLucky
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