The mehtod as you have outlined it is workable, simple, and likely to leave one in trouble given that the base assumptions are wrong, IMO:1.)Inflation - a tricky number which depending on which gubmint official/administration is churning the data will not reflect the real world. Inflation numbers do not take into account real world energy costs, sudden rises in production costs (due to energy costs), and the power for poor government policy to cause drastic erosion of the value of our currency. The low of 2.5% reflects a probable temporary low which is unlikely to remain for long...i.e. I would plug in 3% with a high of 5% for yearly spikes due to fubars such as a war with Iran (energy cost max out). The other thing looming on the horizon that will eat our dollars and raise the hidden tax of inflation is the ever larger Federal Debt which is in effect squeezing the available cash out there...and prinint more...well that causes inflation.2.)The model proposed, as you noted, does not factor in sudden market drops which alter how much you can safely take out and retain your capital....this is why dividends in corporations do not always go up and may suddenly vanish. More advanced models run through Monte Carlo simulations which look at a variety of changing inputs (some linked, some not) creating a variety of outcomes...they then average the results and give you a probable most likely scenario.3.) His model ignores medical costs which can rise suddenly, it ignores the tree falling over and causing needs for new roof, it ignores the things that happen in real life.4.) A "on auto-pilot" portfolio/method will work for short periods of time yet without readjustment and input of new real world numbers it can cause failure very quickly. You need that rainy year cushion for when inflation/markets go wrong and you need the discipline to put away and increase your capital when the stars align and all goes better than expected.As a initial model it is ok....as a long term guide it is lacking in feedback and new data....it is worth noting that most "professional" models are more conservative since they assume worst cases and financial advisers can be sued or lose business by giving bad advice (well sometimes that is).Just my viewmd
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