Quote:
Originally Posted by noppenbd
To follow up on this, the Trinity study assumed you pick an initial withdrawal rate of 4% and adjusted the dollar amount upward each year for inflation
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One comment on this- the 4% was the conclusion of the trinity study, not an assumption. Trinity study evaluated several withdraw rates (2%, 2.5%, 3%, 3.5%, 4% etc...) and back tested these SWR against market returns using various asset allocations.
4% was the "sweet spot- high enough to suggest not needing to oversave, and low enough that the portfolio survived down markets.
There are new studies out which tweak the trinity study conclusions (on how to withdraw in down years).
06-04-2008, 01:19 PM
