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Subject:  Re: Retire Early & 4% Withdrawal Date:  3/4/2021  6:46 AM
Author:  CuriousQ Number:  101522 of 102725

At age 38 (1991) Billy and Akaisha Kaderli walked away from their jobs to travel the world. They had $500,000 in net worth. "I calculated our portfolio extracting 4% per year, with our first year withdrawal being $20,000." Twice, 2000-2003 & 2008-2009, their net worth halved. Their current net worth has increased to 373% ($1865330)of original net worth.

Remember that the 4% was "worst case" *real* withdrawal. So, in the worst 30 year period, a 4% (plus inflation adjustment) annually ran out of money after 30 years. The Kaderlis' 30 year period didn't have inflation coupled with stagnant returns (remember "Stagflation?") that required large increases in withdrawals but no large growth of the portfolio. Also, being 100% in the S&P500 was a big benefit in the last 30 years because the returns were unusually high and the handful of drawdowns weren't very long.

On top of all that, the article says "Our actual spending has been much less over the years," so they not only had a really great 30-year slice to live off their investments, but didn't even take the full 4%. What the article shows me: The thing that intercst says regularly is true: You can plan for the worst case 4% (using a 60/40 or 80/20 allocation), and if you make no spending adjustments along the way, you'll hit year #30 with more than you started *on average.*

My plan doesn't assume *average* returns or inflation or spending (we used to spend $0 on cell phones and high speed internet). Also, having worked more than 35 years, I don't have any zeros in my social security calculations. I'm not as pessimistic as some, so I *am* planning on getting the social security payments that were estimated by I also tried to build in some other changes we can make so there's no "withdraw 4% blindly and never change" method.
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