What is generally referred to as the 4% SWR assumes that a person starts with a withdrawal of 4% of the principal balance, then increases the withdrawal each year by the rate of inflation. Based on different equity versus fixed allocations, the data for the past 100 or so years shows the survival rates for such a plan. My question is whether anyone has studied the data to see what the survival rates would be for similar asset allocations where 4% of total principal is withdrawn each year, without fixed adjustments for inflation. Since the portfolio balance would rise and fall in relation to stock/bond performance in any given year, this could result in there being some years where the withdrawal amount would be less than the previous year. By the same token, it could be more...up and down over time. I'm curious whether the survival rates for the straight 4% withdrawal are better or worse than the inflation adjusted method. Does anyone know of any studies on this issue? I'm just curious to see whether a straight 4% does better or worse based on any 30 or 40-year period over the past 100 years or so, similar to the studies done on the inflation adjusted method. Thanks.
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