But these studies also contain the Great Depression as well.It should be called the "4% rule of thumb" or "the 4%±1% rule of thumb." That would eliminate a whole category of article saying "We predict the stock market is going to suck, and we predict the right number is 3.3%." Or "if you do thus-and-such, you can get 4.5%."
The paper's subtitle is "New Market Conditions and Retiree Needs Require Rethinking Retirement Spending." But the whole premise of the original and later studies is that they attempt to gauge a safe withdrawal rate based on all of the past history available to the researchers.
So "new market conditions" are irrelevant unless they can convince us how present conditions are worse than anything that has ever occurred before--worse than the Global Financial Crisis, worse than the 1966-1982 Death of Equities era, worse than the Great Depression, worse than the Long Depression of 1873-1896.
The straw man here is in the second sentence: "However, market conditions today are not the same as they were back in the 1980’s when the move from defined benefit to defined contribution retirement plans accelerated." But neither Ted Bengen's original study, nor any other I know of, is based on "market conditions as they were in the 1980's."
And from that withdrawal video posted on another thread, the Morningstar lady suggested higher withdrawals because bond yields were higher today. And then they mix a whole bunch of assets types along with factor funds.
It would be nice to find some general consensus on this topic.
Statistics: Posted by rockstar — Wed Dec 11, 2024 11:21 am — Replies 8 — Views 319