The traditional studies (incorrectly) claimed a 30 -
year safe withdrawal rate of 4 % of a portfolio's initial balance (plus inflation).
I'm serious enough about retirement that I started doing a lot of research
on safe withdrawal rates and withdrawal strategies, see here.
He told them that the highest
safe withdrawal rate from a retirement portfolio was about 4 percent, not the 5 or 6 percent many were using.
Another way to look at the data: Plot a time series chart of different
safe withdrawal rates over time both for 30 - year and 60 - year horizons.
The conclusion is that using only safe assets for retirement income for a 30 - 40 year retirement
implies safe withdrawal rates of closer to 3 % than 4 %.
When
calculating safe withdrawal rates, I have only worked with stock / bond / cash portfolios because they are the asset classes with returns going back 100 + years.
I am going to continue to post honestly
re safe withdrawal rates and scores of other critically important investment - related topics.
Their is a general consensus in the financial community when it comes to
safe withdrawal rates of your portfolio, the 4 % rule or the 25 times your annual expenses rule.
The 30 - Year
Safe Withdrawal Rate with stocks and corporate bonds is higher than 5 % (plus inflation) provided that you vary allocations with valuations.
I put up my famous post pointing out the errors in the Old
School safe withdrawal rate studies on the morning of May 13, 2002, Sensible.
Phrases with «safe withdrawal rate»