I don't know how he'd feel. Hopefully he'd be happy that he's still a millionaire at 80 and that given his life expectancy, he can still withdraw like $140K a year for the rest of his life without running out. Plus Social Security and any other guaranteed income he has.Actually, I'd argue that is the problem is of the "little rich person", who couldn't really sustain an 80% drawdown from a 50/50 portfolio if trying to do a 4% SWR. Perhaps your typical retired doctor with $5M. How will he feel if 1966 repeats and by the time he's 80 all he has left is $1M? And during the grind down to that?
I won't be spending anywhere near 4%, but not because I don't think I could if I wanted to. Our challenge is getting our giving level up that we're spending or giving at least 4%.
If something crazy happens like high inflation I guess we'd probably dial back the giving first though.
But to answer your question, with a taxable portfolio large enough that it is unlikely that we touch the retirement accounts at all ourselves, I don't spend a lot of time worrying about the effect of inflation on the TIPS portion of our portfolio. Between TIPS, real estate, and stocks, I think we'll be okay and certainly better than the majority. These are real rich person problems we're worrying about here.
We're not immortal. It's okay to have a draw down. I guess if it really bothers you get a "plan B" where when the portfolio hits a certain amount you just annuitize it all or something.
Statistics: Posted by White Coat Investor — Tue Mar 04, 2025 11:26 pm