A historical model like FireCalc estimates that 5% of initial investment, not inflation indexed, taken from a 100% stock portfolio, has a 2% chance of running out of money before 30 years. If the withdrawal is indexed for inflation every year from the same starting point, the failure probability by 30 years is about 23%. It the withdrawal rate is reduced to 4% that failure rate drops to 6.5%. If the portfolio adds bonds to a stock/bond ratio of 60/40 the failure rate drops to 4%.
Statistics: Posted by dbr — Wed Dec 11, 2024 7:08 am