No. of Recommendations: 4
raddr writes,

<<<<<<I'm wondering if anyone leaves a margin of error when deciding to ER. Do you just take 5 years, 20% of your 25x yearly spending, pay the taxes on the hefty withdrawal and dump the cash into an inflation-matching cash investment and that's it?>>>>>

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.

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