Valuation-Informed Indexing #134 — Is the Lowest Possible Safe Withdrawal Rate 1.6 Percent or 2 Percent?

I’ve posted Entry #134 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Is the Lowest Possible Safe Withdrawal Rate 1.6 Percent or 2 Percent?

Juicy Excerpt: I have doubts about one of the numbers generated by the calculator. I was not the sole developer of the Risk Evaluator. I worked with John Walter Russell, who died in October of 2009. John and I had a number of differences of opinion during the time the Risk Evaluator was being developed. On a number of issues, he ended up going along with my take. On this issue, I went along with his take. I think his take is perfectly reasonable. Still, I always feel a little funny when the particular number that he favored pops out of the calculator. So I thought it might be a good idea to explain the circumstances here. Going through the background might help people see that there are often not right or wrong answers to the questions addressed by investment studies and calculators.

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