An earlier blog entry described the background of my recent correspondence with Michael Kitces on safe withdrawal rates (SWRs). Set forth below is the text of an e-mail that Michael sent to me on September 22.
I finally managed to get a brief blog post up on this issue on my site. I thought you might be interested.
I hope that all is well with you these days! Thanks again for the great
dialogue on this!
With warm regards,
Juicy Excerpt: For those who already retired at the start of the decade following the 4% rule, it may be time to sit down and update the plan, and face some hard facts given that the portfolio will almost assuredly be underperforming any original projections at this point. If Russell’s projections of a sub-2% withdrawal rate prove to be true, or are anywhere close, those who retired back in 2000 may ultimately find that the “4% safe withdrawal rate” was still far too aggressive, making the point once again about how critical it is to incorporate market valuation into retirement projections!