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It seems to me, detailed modelling requires introducing the concept of tolerance.

When the first vacuum tube electronic computers were built, they were designed to work within the normal tolerances of the components used to build them. Your portfolio may average 5% return for life, but there may be time frames where it earns 10% or more and others where it loses money or earns much less. Inflation can be very low for a while, even zero, and very high at other times.

A really detailed model needs to factor these aspects in.

If you have followed Motley Fool or investing for a while, you know that the numbers we use today are very much influenced by recent events and numbers. The same calculation made every 10 years for the last 50 years probably would give wildly different numbers. This emphasizes that the best you can do is aim for the middle and build in some reserves--hoping you will be able to adapt to whatever comes up. Most estimates fail to take into consideration the magnitude of the variances.

My philosophy when I retired Jan 1, 2000, is I will try it based on what I know, but I won't be confortable until I have made it through one stock market meltdown and survived. This philosophy has served me well, because some of my estimates were right on target, but others missed quite a bit. Reserve assets over the minimum served me well.
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