pshaffer wrote,

That is what one would think, but all the withdrawal tables I have seen withdraw a percent (say 4) of the INITIAL amount, NOT of the appreciated amount. Most also have an allowance for inflation, so at year 15 you are removing an amount equal to 4% of 1M, plus a bit for inflation, not 4% of the amount available at year 15. This is the crux of my message, that the withdrawal tables do not stand my reality test, that is to say if I put myself into the 15 year situation, I'm sure not going to be taking out 60 or 70k when I could take much more perfectly safely.

You're right!

The 4% (or whatever) withdrawal is what's necessary to allow you to survive a repeat of the "Crash of 1929" happening immediately after you commence your retirement withdrawals. If the "Crash" doesn't happen, you don't have to wait 15 years. You can logically increase your withdrawal in Year 2 if your portfolio has grown in value. If your portfolio is equal to or less than the previous year's year-end balance, then the most you should withdraw is the 4% plus the inflation adjustment.

I call this the "Pay Out Period Reset Model" and I'm currently modifying the Retire Early Safe Withdrawal Calculator to test the effect of this strategy on the Terminal Values at the end of a pay out period. This method won't change the "100% safe" initial withdrawal rate, but it should reduce the Terminal Values for all but the minimum case, and allow a retiree to spend more money over the course of the pay out period. It's just that there is no way to know up front when and how much the retiree can increase the annual withdrawals.

I hope to post the "Pay Out Period Reset Model" on the Retire Early Site on Jan 1st.

intercst