“I Need to Work Up the Courage to Work This Harder”

Michael Kitces recently posted a blog entry at his site titled Why Does Everybody Think Safe Withdrawal Rates Are an Autopilot Program…. They’re NOT. Set forth below is the text of my second comment to the discussion thread:


You are one of the good guys re this issue (and a good number of others). I am of course grateful for the link and for all the good you have done in this area.

The thing that troubles me is that you say that 4 percent “MAY be too high.” I presume that what you mean by that is that 4 percent may work. That is of course true. But is there any question whatsoever that 4 percent is NOT safe? At the top of the bubble, the data said that retirements using a 4 percent withdrawal had only a 30 percent chance of surviving 30 years. Is there any reasonable person alive who would say that a retirement with a one in three chance of working out is “safe”? Those retirements are high-risk retirements. The words “risky” and “safe” are antonyms, not synonyms.

There shouldn’t be any controversy over the calculation of numbers. Everyone is this field should acknowledge today that the Old School SWR studies misstate the realities by failing to take valuations into consideration. In any other field of human endeavor, the experts in the field would be doing everything they could to publicize how dangerous these studies are and to let people know about the correct numbers.

That doesn’t happen in this field because stock investing is so emotional an endeavor and lots of experts don’t want to hurt the feelings of their clients by letting them know that they have followed dangerous strategies. We need to change that. I would like to see more and more people coming forward asking at a minimum that NUMBERS be reported accurately. Is there any question in anyone’s mind today as to whether valuations affect long-term returns (and thus SWRs) or not?

Again, I applaud you for being one of the leaders in helping out re this matter. My concern is that the efforts that those of us who have been trying to steer things in a good direction have been taking have not been good enough for nine years now. The economic crisis is a serious thing. We need to do more. We need to be MORE frank with people. We need to start moving forward to the better places that are very much open to us once we all begin reporting what the data says ACCURATELY and FRANKLY and PLAINLY.

My words are not directed at you in particular, Michael. They are directed at everyone in the field. They are directed at ME. I need to work up the courage to work this harder too. We all need to be working together to get from where we are today to where we all deep in our hearts want to be tomorrow.



  1. Evidence Based Investing says

    My concern is that the efforts that those of us who have been trying to steer things in a good direction have been taking have not been good enough for nine years now.

    Has is ever occurred to you in those nine years that you have been going about it in a manner that is catastrophically unproductive?

    I need to work up the courage to work this harder too.

    No Rob, you need to work up the courage to work this smarter.

  2. Rob says

    Catastrophically unproductive for whom, Evidence?

    It would certainly be fair to say that a good number of Buy-and-Hold advocates view it as catastrophically unproductive for me to “cross” them by reporting the safe withdrawal rate numbers accurately.

    How about the aspiring retirees who use those studies to plan their retirements? Do they matter?


  3. Evidence Based Investing says

    Catastrophically unproductive for whom, Evidence?

    For you Rob. You admit in the quote above that your efforts “have not been good enough for nine years now”.

    And Scott Burns got it right when he said “You Go About It in a Manner that is Catastrophically Unproductive”

  4. Rob says

    Say that I agree to post dishonestly, Evidence.

    And say that I make millions pushing Get RIch Quick.

    What will it get me if our economic and political systems collapse?

    That cannot be the right way to go.

    I am seeing more and more people opening up to the idea of permitting honest posting on investment topics on the internet all the time. Buy-and-Hold is the investing model of the past. Valuation-Informed Indexing is the investing model of the future.

    I’m looking forward, Evidence. The ugliness we have seen over the first nine years of out discussions holds no appeal to me. I’ll help build a model that gets people away from that junk. I don’t want to put two seconds of effort into keeping the hate and anger and contempt alive. I find that stuff a 100 percent stone cold bore.

    Re contributing to that stuff, I would be grateful if you would try to find someone else. It’s not my particular cup of tea. It’s not a close call.


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