Great video. It has been my experience that the problem with Monte Carlo analysis is that people will look at the high-end outlier results and say “that’s nonsense, will never happen“ but then look at the worst case outlier results and are scared and believe very well could happen.
@mere_cat2 ай бұрын
I kind of like the idea of using guaranteed income like Social Security and pension for my needs and then taking a fixed percentage from my portfolio for wants. Not a big deal if my income fluctuates a bit from year to year.
@user-pp5do8rm3w2 ай бұрын
This is my plan.
@stevejohnson21082 ай бұрын
I totally agree with most of what you said. I am spending a lot more money now than in the future for sure. The travel budget alone is over 50K per year now, but in a couple of years that will be less than half. Since I don't have any debt, the wife and I will be very hard-pressed to also spend on many other things as we do now (health insurance since we are not under Medicare yet comes to mind, dinners, I am beginning to enjoy cooking at home and cars. Got my dream car so I am good to go). People need to realize the most important things in life are, health, family, friends, and time to enjoy it all.
@ld57142 ай бұрын
Great discussion of varying approaches to this important topic for people's consideraton. As usual, great content and easy to follow discussion. Thanks Eric. Have a great week. Larry, Central Valley, Ca.
@erickarnell2 ай бұрын
Great discussion of opportunity costs starting around 6:00.
@Jeff-yy5fe2 ай бұрын
Love the dynamic spending model. Andy and Tony at SG do a great job keeping me inline, but I’m always pushing to spend more! Not taking it with me!
@kcnicely2 ай бұрын
Excellent Video. I think the dynamic strategy you choose to be a very personal decision. I agree a more complex approach is best but hard to implement on your own.
@joramster60012 ай бұрын
Dynamic spending is a game changer and aligns with life whether that is unexpected or special expenses as well as the volatility of the market riding out the noise. It’s more adaptable and in the end with spending guardrails gives on more confidence in spending.
@glockman992 ай бұрын
Great video!!! Very informative. Thank you.
@Andocus12132 ай бұрын
1st and 2nd dynamic strategy are using $34k which is 3.4% of original balance. How was this calculated? Why not 3% or 3.6% ?
@rickdunn38832 ай бұрын
Thanks for this video. Interesting. Chart #1 appears about a 60/40 portfolio? Bengan's 4% study, used a 50/50 portfolio. What about increasing diversification of sub asset classes, would that increase the SWR? What about the effect of 1% + fees? Good point about Fire.
@dougb83252 ай бұрын
Good video. What do you think of Kitces' ratcheting (up only) withdrawal strategy?
@user-bv4sj2gq7g2 ай бұрын
I don’t spend $8k per month now. I guess I won’t mind not spending it in retirement.
@erickarnell2 ай бұрын
Don't let focusing on the spending amount in the particular example make you miss the point of the entire video.
@priestesslucy32992 ай бұрын
This is the situation with my grandmother. Between her Widow's Pension, Social Security and the rent of her previous home, she brings in 8500 per month. She literally spends less than 2500, and that's including 800$ of tithes
@jh32acx2 ай бұрын
The second strategy "endowment'' spending chart for the bad trial 1966 case at around the 16 minute mark, seems to show the annual spending floor is only ~$30K instead of the $34K mentioned in the video and as shown in the other charts ? Is there a chart error, or am I misunderstanding this strategy ? Otherwise, thanks for the great video !
@DP-ol5uv2 ай бұрын
The 4% rule is outdated and irrelevant. Everyone has a different needs analysis on how much your annual expenses are. And annual expenses can change year to year. Especially with inflation. You first need to know how much you spend each year and how you can cover your expenses from your savings and social security. Your Expenses is the most important number you need to know during retirement.
@onlywenilaugh65892 ай бұрын
Sounds complicated, all these strategies. I'm going to look at what I need, then add buffer each year for misc and fun spending, then add it up and put it through the Montecarlo tests. If in the 90s, I'm not going to worry much about things. SS will be icing if it's there.
@randolphh80052 ай бұрын
That strategy will work, but may leave a large amount of unspent money, which is one of the points of this video. What are safer ways to not leave large amounts. Obviously some persons want to leave a legacy and some don’t. Either is fine if that is the desired outcome. The fact is that most retirees with portfolios leave more money than they intended.
@edwardloizides54152 ай бұрын
Way too detailed . Keep it simple . Save more spend less so that 4 % will always work. If you can’t spend 4 % then the financial markets and advisors are FOS.
@alphamale23632 ай бұрын
Yes. I'm skeptical many folks will be able to stick with strategies this complex. Most folks don't even use the 4% rule.