Apologies, didn't read the three pages of posts, but my thought is "so what"?
Most people don't save enough for retirement... Does that mean those that know better shouldn't save enough?
By extension, many won't have a portfolio to withdraw from, the vast majority of their spending will in fact be their "income" from social security, pensions, any interest from savings, etc. Does that mean that's what we should do?
Most people still think dividends are some sort of "free money"... Does that mean those who understand "total return" should pretend we don't know better?
With very rare exceptions, I've never seen someone "recommend" withdrawing 4% (or other constant dollar / SWR amounts). It's a very useful "planning" tool, but IMHO a very poor "withdrawal strategy", especially when better ones like VPW, TPAW, etc. exist. So I'm not even remotely surprised few people actually follow a 4% withdrawal... In fact, I'd be surprised if more than a few % of people did...
Some feel an obligation to leave an inheritance. I know my parent, despite most of their children telling them otherwise, feel the need to leave something behind. Which naturally means they are spending less than they could. Does that mean everyone else should do the same? "Die with zero" makes a strong argument against this...
Lastly, we have to factor in the very strong returns we've had for a very long time... If people knew the market would return as much as it has, they could have saved a lot less and/or retired a lot early... But we don't tell people to expect those returns to continue, we tell people to plan for much lesser returns... But what happens when we retire, and the markets remain much better than expected? I'll use VPW as an example, as I have a philosophical difference with its creator (longinvest) on this point... Let's say our normal spending is $100k a year, but VPW says we can spend $200k in a given year. What if there's nothing we really want to spend the "extra" $100k a year on? Sure, we could give it away... But no one is "forcing" us to spend more (unless you take longinvest's more dogmatic view that is exactly what you should do). But personally, if markets remain strong like they are now, we'll probably be spending less than "we could", and I'm completely OK with that.
And we shouldn't forget that if markets turn the other way, the numbers probably start to look much different... When portfolios are growing faster then we spend, it looks like people are withdrawing very little... If markets aren't growing, or are crashing, unless people cutback drastically (which some might), compared against their now smaller portfolio, they will be withdrawing more. (Even in my VPW example, since I'm not as dogmatic about it, I'll probably withdraw less than VPW says I can in "good years", but might withdraw the full amount recommended in "bad years" - which would be a higher % of my lesser portfolio.)
Most people don't save enough for retirement... Does that mean those that know better shouldn't save enough?
By extension, many won't have a portfolio to withdraw from, the vast majority of their spending will in fact be their "income" from social security, pensions, any interest from savings, etc. Does that mean that's what we should do?
Most people still think dividends are some sort of "free money"... Does that mean those who understand "total return" should pretend we don't know better?
With very rare exceptions, I've never seen someone "recommend" withdrawing 4% (or other constant dollar / SWR amounts). It's a very useful "planning" tool, but IMHO a very poor "withdrawal strategy", especially when better ones like VPW, TPAW, etc. exist. So I'm not even remotely surprised few people actually follow a 4% withdrawal... In fact, I'd be surprised if more than a few % of people did...
Some feel an obligation to leave an inheritance. I know my parent, despite most of their children telling them otherwise, feel the need to leave something behind. Which naturally means they are spending less than they could. Does that mean everyone else should do the same? "Die with zero" makes a strong argument against this...
Lastly, we have to factor in the very strong returns we've had for a very long time... If people knew the market would return as much as it has, they could have saved a lot less and/or retired a lot early... But we don't tell people to expect those returns to continue, we tell people to plan for much lesser returns... But what happens when we retire, and the markets remain much better than expected? I'll use VPW as an example, as I have a philosophical difference with its creator (longinvest) on this point... Let's say our normal spending is $100k a year, but VPW says we can spend $200k in a given year. What if there's nothing we really want to spend the "extra" $100k a year on? Sure, we could give it away... But no one is "forcing" us to spend more (unless you take longinvest's more dogmatic view that is exactly what you should do). But personally, if markets remain strong like they are now, we'll probably be spending less than "we could", and I'm completely OK with that.
And we shouldn't forget that if markets turn the other way, the numbers probably start to look much different... When portfolios are growing faster then we spend, it looks like people are withdrawing very little... If markets aren't growing, or are crashing, unless people cutback drastically (which some might), compared against their now smaller portfolio, they will be withdrawing more. (Even in my VPW example, since I'm not as dogmatic about it, I'll probably withdraw less than VPW says I can in "good years", but might withdraw the full amount recommended in "bad years" - which would be a higher % of my lesser portfolio.)
Statistics: Posted by SnowBog — Fri Sep 26, 2025 3:23 pm — Replies 110 — Views 6496