Subject: Re: Dynamic withdrawal rules during retirement
So you think the rule is garbage just because you were not able to come up with the steps?

Yeah, me and a dozen or so other people in the early-retirement.org FIRE and Money forum.
Maybe cfiresim came up with something that works, but we could not figure it out as Mssrs. Guyton and Klinger described in their paper.

Also, that cfiresim thing is a black box. It's a simulation--using historical data, not a spreadsheet that tells you what to do and when. We don't see the computation steps, so we cannot validate that it is accurate to the G-K paper.

The G-K Spending Plan does not pass the "explain to your wife" test. If it is so hard to understand that none of us dozen-plus people could figure out how to implement it, then it is not usable. Maybe it could pass the Richard Feynman test, but it doesn't pass the mother-in-law test.

IIRC, the G-K spending plan said something like to withdraw any excess return over the scheduled return and plunk that in the cash bucket, and withdrawals come out of that bucket first. I don't recall the details now, nor consider it worthwhile to revisit the paper. That complexity with the cash bucket, is I believe, their nod to people who really really really want the illusory comfort of a bunch of cash.




What if both stocks and bonds decline in the first couple of years of your retirement?

What if?
I retired in September 2006, just in time to walk into the 2008/2009 bear market.

Every day is the start of a possible sequence of returns risk. Every day is the first day of the rest of your portfolio.

SORR risk is only a risk if you retire on a shoestring, with barely enough money.