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Personal Finance (Not Investing) • Re: Monte Carlo vs SWR vs VPW

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That simulation has been thoroughly debunked in this post and the ensuing discussion:
What I showed was how to do a Monte Carlo simulation of the VPW amortization. I did several different simulations using different assumptions in that post as well as subsequent posts. If you disagree with an assumption, you can always do a Monte Carlo simulation with your own preferred assumptions. The point is Monte Carlo is a tool to explore the range of outcomes of a withdrawal strategy. VPW and SWR are both withdrawal strategies and you can explore them both using Monte Carlo simulations.
Which brings up that part of a study should be an exploration of how the results depend on the inputs. That can be more informative in itself than producing any particular prediction of outcome.

Statistics: Posted by dbr — Tue Dec 31, 2024 11:19 am



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