Case Study Becky - ChooseFI Episode 152R
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https://earlyretirementnow.com/2019/11/08/safe-withdrawal-rate-case-study-for-becky-and-stephen
https://www.choosefi.com/152R
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https://earlyretirementnow.com/2017/01/25/the-ultimate-guide-to-safe-withdrawal-rates-part-7-toolbox
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https://earlyretirementnow.com/2018/08/29/google-sheet-updates-swr-series-part-28
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Parameters:Results:
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Portfolio:Failure Probabilities of different initial withdrawal ratesFailure Probabilities Conditional on S&P500 Drawdown
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Stocks60%SWRAllSince 1926Since 1950CAPE<=20CAPE>20CAPE>30
S&P500 High
Drdwn 0-10%
Drdwn 10-20%
Drdwn 20-30%
Drdwn>30%
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Bonds35%6.50%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%
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Cash5%6.75%1.32%0.09%0.13%1.51%0.72%0.00%4.05%1.38%0.00%0.00%0.00%
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Custom Series (not yet used!)
0%7.00%7.36%5.28%6.57%4.83%15.42%20.34%13.24%13.62%0.00%0.00%0.00%
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Gold0%7.25%14.84%11.76%14.02%9.97%30.36%49.15%20.27%27.07%8.97%0.00%0.00%
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Fama-French Style Factors. Only post Jul-19267.50%21.68%18.33%20.58%15.86%40.24%62.71%28.11%30.86%31.38%1.42%0.00%
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Small Stocks (SMB)0.00%7.75%28.58%24.35%25.25%22.96%46.51%79.66%36.49%36.72%38.62%17.45%0.00%
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Value Stocks (HML)0.00%8.00%36.52%32.50%33.96%30.74%54.94%86.44%42.97%45.17%45.52%35.38%2.44%
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Expense Ratio (p.a.)0.05%8.25%44.16%40.65%42.05%37.01%66.99%96.61%46.49%52.76%54.48%49.53%9.41%
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Project Future Real Returns 2018 and forward
8.50%50.66%47.59%48.11%43.35%73.98%98.31%51.89%58.62%60.34%54.72%20.21%
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Stocks for next 10Y3.75%SWRs to target different Failure RatesSWR to target Failure Rates, Conditional on S&P500 Drawdown
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Stocks after that5.00%
Failure Rates
AllSince 1926Since 1950CAPE<=20CAPE>20CAPE>30
S&P500 High
Drdwn 0-10%
Drdwn 10-20%
Drdwn 20-30%
Drdwn>30%
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Bonds for next 10Y0.25%0.00%6.59%6.73%6.73%6.59%6.65%6.77%6.59%6.64%7.07%7.49%7.79%
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Bonds after that1.50%1.00%6.73%6.85%6.84%6.70%6.81%6.80%6.64%6.73%7.10%7.50%7.85%
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Cash for next 10Y0.00%2.00%6.82%6.90%6.89%6.81%6.83%6.82%6.67%6.81%7.16%7.51%7.99%
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Cash after that1.00%5.00%6.92%6.99%6.96%7.01%6.89%6.89%6.80%6.88%7.21%7.58%8.10%
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Custom Series for next 10Y
0.00%10.00%7.07%7.16%7.09%7.25%6.94%6.96%6.90%6.95%7.26%7.63%8.26%
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Custom Series after that0.00%25.00%7.61%7.78%7.75%7.81%7.14%7.04%7.36%7.19%7.42%7.89%8.68%
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Gold1.00%50.00%8.47%8.60%8.61%8.87%7.87%7.29%8.37%8.17%8.13%8.30%9.50%
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Failsafe WRs around 5 Prominent Market Peaks
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Retirement Horizon (Months)
420
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Final Value Target (%of initial)
0%19296.82%
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1964-696.73%
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Supplemental Income/Expenses: Additional Cash Flow in % of initial Net Worth: >0 means income, <0 means additional withdrawal1972/736.81%
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Month% of initial NW1999-20006.77%
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1-0.0492%2007-20097.71%
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2-0.0492%Failsafe WRs by Decade
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3-0.0492%
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4-0.0492%1920s6.82%
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5-0.0492%1930s6.88%
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6-0.0492%1940s7.03%
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7-0.0492%1950s7.52%
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8-0.0492%1960s6.73%
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9-0.0492%1970s6.81%
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10-0.0492%1980s9.46%
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11-0.0492%1990s6.96%
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12-0.0492%2000s6.77%
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13-0.0492%
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14-0.0492%
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15-0.0492%
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16-0.0492%
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17-0.0492%
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18-0.0492%
50
19-0.0492%
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20-0.0492%
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21-0.0492%
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22-0.0492%
54
23-0.0492%
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24-0.0492%
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25-0.0492%
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26-0.0492%
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27-0.0492%
59
28-0.0492%
60
29-0.0492%
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30-0.0492%
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31-0.0492%
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32-0.0492%
64
33-0.0492%
65
34-0.0492%
66
350.0239%
67
360.0239%
68
370.0239%
69
380.0239%
70
390.0239%
71
400.0239%
72
410.0239%
73
420.0239%
74
430.0239%
75
440.0239%
76
450.0239%
77
460.0239%
78
470.0239%
79
480.0239%
80
490.0239%
81
500.0239%
82
510.0239%
83
520.0239%
84
530.0239%
85
540.0239%
86
550.0239%
87
560.0239%
88
570.0239%
89
580.0239%
90
590.0239%
91
600.0239%
92
610.0239%
93
620.0239%
94
630.0239%
95
640.0239%
96
650.0239%
97
660.0239%
98
670.0239%
99
680.3257%
100
690.3257%
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