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Regarding the 5% withdrawl rate:

The 4% rate that is regarded as safe (given the right portfolio mix) is a fixed amount--4% of your portfolio when you start retirement, adjusted for inflation each year.

I have heard about a 5% rate that is not fixed. That is, it is safe to withdraw 5% of your portfolio each year as long as it is always 5%--you take less in years when your portfolio is down and more when it is up. Your portfolio should survive 30 years under the worst of conditions if you do it this way.

Obviously you will always be able to take 5% so long as there is more than zero. But if you are willing to take less during down years, you can live a little higher on the hog in up years without going bust.

Not my way of doing it, but there it is.

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