Yesterday’s blog entry reported on an e-mail that I sent to Academic Research Wade Pfau on March 3, 2011. Wade responded later the same day.
He said that the Returns Sequence Reality Checker looked fine.
He provided the following link:
The link makes reference to the “New School on safe withdrawal rates.” Wade observed that: “Maybe your “New School” term will get some more traction after all.”
Wade added that: “I wrote the whole paper in a span of 8 days and didn’t work through all the implications in advance, but I realize now that I should cite something of yours about SWRs when preparing the final draft before publication.”
I responded the next day. The text of my response follows.
Thanks so much for your help with the Reality Checker. That’s super.
Re citations, I think the proper thing to refer to is The Retirement Risk
Evaluator. That lets the numbers do the talking:
There’s a funny story about the “New School” terminology. That’s actually not my term. Dallas Morning News Columnist Scott Burns gained a certain measure of fame writing about SWRs. Fidelity Fund Manager Peter Lynch once wrote an article saying that a 7 percent take-out is good because that is the average return for stocks. Scott wrote an article correcting him, citing the Old School studies. Lynch graciously offered him a column at a magazine where I believe he had some sort of ownership interest (it might have been “Worth,” I’m not sure).
So I thought Scott would be the perfect person to publicize the work I had done with John. At first, he was highly interested. Then he got cold feet. About six months later, he wrote about it but only in answer to a reader question rather than as a separate column (and he failed to link to the calculator). I think he didn’t want to give my name. So he said that these ideas were being put forward by some nameless “New School.”
I got into an extensive e-mail correspondence with him, which he permitted me to post as blog entries (in some cases I just posted summaries). At one point, he got huffy and said that my approach was going to prove to be “catastrophically unproductive” (this phrase greatly pleased the Goons) and that my suggestion that there was a New School of SWR analysis “reeks of personal aggrandizement.” He said this about ME!
I pointed out that the New School terminology had come from his own column. That didn’t seem to impress him too much.
If you’re having a hard time believing this really happened, there are Post Archives:
I have a hard time believing it happened myself. And I was there from the first day!