No. of Recommendations: 1
<<First of all I don't believe in the "4% rule" since I believe that it is the product of selective backtesting, i.e. datamining. I do, however, have a modest cushion in addition to what I felt I needed to retire comfortably. It helps me sleep better.>>

The "selective backtesting, i.e., datamining" (as you describe it) that underlies the 4% rule was used to determine the worst case pay out period over the past 130 years. It hard to fault the "4% rule" for containing any undue optimism -- or any optimism at all.

That said, it's fine for folks to not believe in it. And I hope whatever alternative withdrawal strategy they employ enjoys equal success.


Well, to state the obvious, a general rule can be stated that all other things being equal (i.e. same investment allocations), a lower withdrawal rate will always be safer. Therefore, no matter how one calculates their withdrawal rate, 3.5% will always be safer than 4.0%, and 4.5% will always be less safe than 4.0%.

This is true regardless of how one calculates their "safe" withdrawal rate.

The issue of investment mix changes the numbers, but a lower withdrawal rate will still always be safer.

Of course, another truism is that the lower the withdrawal rate, the longer one must work (or the more money one must save) before ER.
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