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Excellent post, DesertBillG. Your plan, while not identical to my own, states a number of concepts that I've been struggling to find a way to describe. Kudos!

As we know from intercst's Retire Early site, if you want to take withdrawals in constant inflation-adjusted dollars, the 100% safe withdrawal rate is below 4%, depending on time horizon. Let's call this the fixed withdrawal scenario (although it is inflation adjusted).

OTOH, the Efficient Frontier site shows that if you're willing to take a percentage of assets each year, and let your income rise and fall with the vicissitudes of the market, even 7% is survivable, although you may not like what that means in dollars during down years. Call this the variable withdrawal scenario.

It has always seemed to me that there is a middle ground between these two scenarios. Your 6%/5%/4% plan sounds reasonable; I may pick different numbers, but the concept is great. I'd love to see such a plan implemented into something like intercst's safe withdrawal spreadsheet, and see what numbers it picks as safe. It's clear that if you have some "backoff points" triggered by a certain market decline, the initial survivable withdrawal rate should be higher than the 4% calculated by the fixed withdrawal scenario.

If you're willing to share your spreadsheet, I'd like to have a copy. Thanks.

Bob H, aka Blues
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