I varied withdrawal rates in increments of 0.1 %.
My current strategy, essentially annually rebalancing a 60/40 portfolio and
varying withdrawal rate according to how the portfolio performs is clearly sub-optimal according to this book.
The Vanguard Group suggested «a more dynamic approach» that
varies withdrawal rates with market performance.
Not exact matches
VIP banking services
vary among banks and might include stock and portfolio analysis, reduced interest
rates on loans and no - fee ATM
withdrawals.
But keep in mind that another solution may be better if you think you'll need to withdraw
varying amounts of money during retirement or if you need your initial
withdrawal rate to be set higher or lower than 4 %.
The safe
withdrawal rate is not a constant number but
VARIES with changes in the valuation level that applies on the day the retirement begins.
The amount that a portfolio balance
varies with valuations depends upon the portfolio allocation, but not the
withdrawal rate.
Many people should blend several
withdrawal rates: one that provides a minimal source of income to cover necessities with absolute safety and other amounts that offer
varying degrees of safety.
Here are some words from an article of yours entitled «Switching with S&P 500 Slices:» «In every case,
varying stock allocations with Professor Shiller's P / E10 would have improved 30 - year Historical Surviving
Withdrawal Rates substantially.
If we could get TIPS at a 2 % interest
rate, our 30 - year Safe Withdrawal Rate by varying allocations with valuations (i.e., switching) would be 4.
rate, our 30 - year Safe
Withdrawal Rate by varying allocations with valuations (i.e., switching) would be 4.
Rate by
varying allocations with valuations (i.e., switching) would be 4.4 %.
The Rule of 25 TIPS Ladders for Today You can increase your 30 - year Safe
Withdrawal Rate to 4.4 % at today's valuations by
varying stock allocations.
If you
vary stock allocations according to P / E10, your Safe
Withdrawal Rate will rise from 4.4 % to 7.0 %.
If you
vary your stock allocation with valuation (switching allocations of stocks and 2 % TIPS) your Safe
Withdrawal Rate improves dramatically.
You can see how your chances of running out of money go up or down for different
withdrawal rates and
varying spans of time in retirement by going to this retirement income calculator.
But by going to a retirement income calculator that uses Monte Carlo assumptions to make its projections, you can see how the chances of your nest egg lasting the rest of your life
vary based on different
withdrawal rates and different estimates of how many years you'll spend in retirement.
Varying guidelines have suggested either a 4 % to 6 % annual
withdrawal rate to best preserve your nest egg.
3 Annuity
withdrawal charges
vary by insurance company, and may start at a higher
rate than 7 %.
The
withdrawal rate WR
varies, as indicated.
You can get an idea of how long your savings might last given various mixes of stocks, bonds and cash, different
withdrawal rates and
varying lengths of time in retirement by going to this retirement income calculator.
But keep in mind that another solution may be better if you think you'll need to withdraw
varying amounts of money during retirement or if you need your initial
withdrawal rate to be set higher or lower than 4 %.
You can estimate how long your savings might last given various stock - bond mixes,
withdrawal rates and
varying lengths of time in retirement by going to this retirement income calculator.
With Switching B, which allows allocations to
vary between 0 % and 100 %, the Safe
Withdrawal Rate was 4.35 %.
Varying allocations can lift the Safe
Withdrawal Rate by more than 1 %.
The 30 - Year Safe
Withdrawal Rate with stocks and corporate bonds is higher than 5 % (plus inflation) provided that you
vary allocations with valuations.
-LSB-...] The short answer is that you should use a
withdrawal rate between 3 % and 4 % and test out how the answers change if you
vary that number.
Thresholds set to:
varies -78-79-80 Allocations set to: 100 % -0 % -0 % -0 % -0 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 6: 1 Failure: 4.1 % (1929, 1930) 5 Failures: 5.6 % 10 Failures: 6.8 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 9: 1 Failure: 3.1 % (1930) 5 Failures: 5.2 % 10 Failures: 6.3 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 12: 1 Failure: 2.5 % (1930) 5 Failures: 4.0 % 10 Failures: 4.7 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 15: 1 Failure: 2.9 % (1930) 5 Failures: 3.9 % 10 Failures: 4.5 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 18: 1 Failure: 3.6 % (1930) 5 Failures: 4.2 % 10 Failures: 4.8 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 21: 1 Failure: 3.3 % (1969) 5 Failures: 3.7 % 10 Failures: 4.2 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 24: 1 Failure: 3.7 % (1968) 5 Failures: 4.0 % 10 Failures: 4.3 %
Better yet, a mechanically
varying allocation based on valuations lifts today's 30 - Year Safe
Withdrawal Rate above 4.5 %.
The percentages
varied at Year 0 since I set each year's
withdrawal rate equal to its 30 - Year Historical Surviving Withdr
withdrawal rate equal to its 30 - Year Historical Surviving Withdrawal R
rate equal to its 30 - Year Historical Surviving
WithdrawalWithdrawal RateRate.
The percentage
withdrawal rate along the way
varied because the (real) balances
varied.
Thresholds set to:
varies -78-79-80 Allocations set to: 100 % -0 % -0 % -0 % -0 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 6: 1 Failure: 3.7 % (1966, 1968) 5 Failures: 3.9 % 10 Failures: 4.2 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 9: 1 Failure: 3.9 % (1966) 5 Failures: 4.2 % 10 Failures: 4.4 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 10: 1 Failure: 4.3 % (1966, 1968) 5 Failures: 4.6 % 10 Failures: 4.9 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 11: 1 Failure: 4.3 % (1966, 1968) 5 Failures: 4.6 % 10 Failures: 4.9 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 12: 1 Failure: 4.9 % (1966) 5 Failures: 5.3 % 10 Failures: 5.7 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 13: 1 Failure: 4.9 % (1966) 5 Failures: 5.3 % 10 Failures: 5.7 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 14: 1 Failure: 5.0 % (1966) 5 Failures: 5.4 % 10 Failures: 5.8 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 15: 1 Failure: 5.0 % (1966) 5 Failures: 5.4 % 10 Failures: 5.8 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 16: 1 Failure: 4.9 % (1966) 5 Failures: 5.2 % 10 Failures: 5.8 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 17: 1 Failure: 4.1 % (1929) 5 Failures: 4.9 % 10 Failures: 5.3 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 18: 1 Failure: 4.5 % (1929) 5 Failures: 5.2 % 10 Failures: 5.7 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 19: 1 Failure: 4.5 % (1929) 5 Failures: 5.7 % 10 Failures: 6.0 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 20: 1 Failure: 4.5 % (1929) 5 Failures: 5.8 % 10 Failures: 6.2 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 21: 1 Failure: 4.5 % (1929) 5 Failures: 5.8 % 10 Failures: 6.2 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 22: 1 Failure: 4.3 % (1929) 5 Failures: 5.6 % 10 Failures: 6.2 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 23: 1 Failure: 3.6 % (1929) 5 Failures: 5.6 % 10 Failures: 6.2 %
Withdrawal rate for first occurrence of the number of failures: Threshold = 24: 1 Failure: 3.6 % (1929) 5 Failures: 5.6 % 10 Failures: 6.6 % Have fun.
I am hoping to make some improvements to my past work, such as allowing asset allocations and savings
rates to
vary over time in my «safe savings
rates» analysis, looking more at the role of international diversification in retirement portfolios, accounting for taxes in retirement
withdrawal studies, and investigating more about lifecycle or target - date funds for both the accumulation and retirement phases.
Continuing
Withdrawal Rates varied from 6.64 % to 7.35 % (plus inflation).
To those who
vary allocations in accordance with P / E10, your 30 - Year Safe
Withdrawal Rate will be 4.28 % if you leave allocations unconstrained (between 0 % and 100 %) and 4.12 % if you constrain stock allocations to 20 % to 80 %.
Early
withdrawal penalties
vary from bank to bank, and this is another important item to consider as you shop for the best CD
rates and open your new account.
y = HSWR80 Calculated
Rate (percent) and x = percentage earnings yield = 100 / [P / E10] 1941 - 1950 y = 0.7318 x + 2.3723 1941 - 1960 y = 0.9635 x + 0.3354 1941 - 1970 y = 1.0644 x - 0.5469 1941 - 1980 y = 0.7842 x + 0.9624 y = HSWR80 Calculated
Rate (percent) and x = percentage earnings yield = 100 / [P / E10] 1951 - 1960 y = 1.201 x - 1.2943 1951 - 1970 y = 1.1936 x — 1.2958 1951 - 1980 y = 0.649 x + 1.562 y = HSWR80 Calculated
Rate (percent) and x = percentage earnings yield = 100 / [P / E10] 1961 - 1970 y = 0.6831 x + 1.1174 1961 - 1980 y = 0.5835 x + 1.5399 Confidence Limits (approximately 90 %, add and subtract these values) Degrees of freedom... Confidence Limits 10... 1.71 % 20... 1.63 % 30... 1.60 % 40... 1.59 % 50... 1.58 % 60... 1.58 % January 2000 Results January 2000
Rates (Safe, Calculated and High Risk) 1941 - 1950 2.33 % 4.04 % 5.75 % 1941 - 1960 0.91 % 2.54 % 4.17 % 1941 - 1970 0.28 % 1.88 % 3.48 % 1941 - 1980 1.16 % 2.75 % 4.34 % More January 2000
Rates (Safe, Calculated and High Risk) 1951 - 1960 (0.26) % 1.45 % 3.16 % 1951 - 1970 (0.20) % 1.43 % 3.06 % 1951 - 1980 1.44 % 3.04 % 4.64 % Even More January 2000
Rates (Safe, Calculated and High Risk) 1961 - 1970 0.97 % 2.68 % 4.39 % 1961 - 1980 1.24 % 2.87 % 4.50 % January 2003 Results January 2003
Rates (Safe, Calculated and High Risk) 1941 - 1950 3.86 % 5.57 % 7.28 % 1941 - 1960 2.91 % 4.54 % 6.17 % 1941 - 1970 2.50 % 4.10 % 5.70 % 1941 - 1980 2.80 % 4.39 % 5.98 % More January 2003
Rates (Safe, Calculated and High Risk) 1951 - 1960 2.24 % 3.95 % 5.66 % 1951 - 1970 2.29 % 3.92 % 5.55 % 1951 - 1980 2.80 % 4.40 % 6.00 % Even More January 2003
Rates (Safe, Calculated and High Risk) 1961 - 1970 2.39 % 4.10 % 5.81 % 1961 - 1980 2.44 % 4.07 % 5.70 % This Week's 2004 Results This Week's 2004
Rates (Safe, Calculated and High Risk) 1941 - 1950 3.29 % 5.00 % 6.71 % 1941 - 1960 2.16 % 3.79 % 5.42 % 1941 - 1970 1.67 % 3.27 % 4.87 % 1941 - 1980 2.19 % 3.78 % 5.37 % More of This Week's 2004
Rates (Safe, Calculated and High Risk) 1951 - 1960 1.31 % 3.02 % 4.73 % 1951 - 1970 1.36 % 2.99 % 4.62 % 1951 - 1980 2.29 % 3.89 % 5.49 % Even More of This Week's 2004
Rates (Safe, Calculated and High Risk) 1961 - 1970 1.86 % 3.57 % 5.28 % 1961 - 1980 2.00 % 3.63 % 5.26 % Safe
Withdrawal Rate Comparisons January 2000 1941-1950 2.33 % 1941 - 1960 0.91 % 1941 - 1970 0.28 % 1941 - 1980 1.16 % 1951 - 1960 (0.26) % 1951 - 1970 (0.20) % 1951 - 1980 1.44 % 1961 - 1970 0.97 % 1961 - 1980 1.24 % January 2003 1941-1950 3.86 % 1941 - 1960 2.91 % 1941 - 1970 2.50 % 1941 - 1980 2.80 % 1951 - 1960 2.24 % 1951 - 1970 2.29 % 1951 - 1980 2.80 % 1961 - 1970 2.39 % 1961 - 1980 2.44 % This Week 2004 1941-1950 3.29 % 1941 - 1960 2.16 % 1941 - 1970 1.67 % 1941 - 1980 2.19 % 1951 - 1960 1.31 % 1951 - 1970 1.36 % 1951 - 1980 2.29 % 1961 - 1970 1.86 % 1961 - 1980 2.00 % Calculated
Rate Comparisons January 2000 1941-1950 4.04 % 1941 - 1960 2.54 % 1941 - 1970 1.88 % 1941 - 1980 2.75 % 1951 - 1960 1.45 % 1951 - 1970 1.43 % 1951 - 1980 3.04 % 1961 - 1970 2.68 % 1961 - 1980 2.87 % January 2003 1941-1950 5.57 % 1941 - 1960 4.54 % 1941 - 1970 4.10 % 1941 - 1980 4.39 % 1951 - 1960 3.95 % 1951 - 1970 3.92 % 1951 - 1980 4.40 % 1961 - 1970 4.10 % 1961 - 1980 4.07 % This Week 2004 1941-1950 5.00 % 1941 - 1960 3.79 % 1941 - 1970 3.27 % 1941 - 1980 3.87 % 1951 - 1960 3.02 % 1951 - 1970 2.99 % 1951 - 1980 3.89 % 1961 - 1970 3.57 % 1961 - 1980 3.63 % High Risk
Rate Comparisons January 2000 1941-1950 5.75 % 1941 - 1960 4.17 % 1941 - 1970 3.48 % 1941 - 1980 4.34 % 1951 - 1960 3.16 % 1951 - 1970 3.06 % 1951 - 1980 4.64 % 1961 - 1970 4.39 % 1961 - 1980 4.50 % January 2003 1941-1950 7.28 % 1941 - 1960 6.17 % 1941 - 1970 5.70 % 1941 - 1980 5.98 % 1951 - 1960 5.66 % 1951 - 1970 5.55 % 1951 - 1980 6.00 % 1961 - 1970 5.81 % 1961 - 1980 5.70 % This Week 2004 1941-1950 6.71 % 1941 - 1960 5.42 % 1941 - 1970 4.87 % 1941 - 1980 5.37 % 1951 - 1960 4.73 % 1951 - 1970 4.62 % 1951 - 1980 5.49 % 1961 - 1970 5.28 % 1961 - 1980 5.26 % Analysis: Calculated
Rates There are two effects that cause these predictions to
vary.
The 30 - year Historical Surviving
Withdrawal Rate y
varies with x, the Percentage Earnings Yield 100E10 / P: y = 1.3426x - 0.2089 plus and minus 2.0 %.
Varying allocations adds about 1 % to the 30 - year Safe
Withdrawal Rate.
The 30 - year Historical Surviving
Withdrawal Rate y
varies with x, the Percentage Earnings Yield 100E10 / P: HSWR100C: y = 1.3426x - 0.2089 plus and minus 2 %.
The interest on your
withdrawal begins at an APR of 26.24 % and will
vary with the market based on the Prime
Rate.
However, the exchange
rates are quite high on this platform and the fee on deposit and
withdrawal varies for various debit / credit cards as well as the fiat currency.