A Rich Life

The Old Ideas on Saving & Investing Don't Work -- Here's What Does

Valuation-Informed Indexing #650: Four Flaws in the Thinking That Retirement Plans Calling for Excessive Withdrawals Can Be Fixed Through Ongoing Adjustments

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I’ve posted Entry #650 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Four Flaws in the Thinking That Retirement Plans Calling for Excessive Withdrawals Can Be Fixed Through Ongoing Adjustments.

Juicy Excerpt: Actually, it’s not entirely settled. Intellectually, it is. But emotionally, lots of us have been reluctant to acknowledge the far-reaching how-to implications of Shiller’s amazing research. There are people in this field who to this day cite the “4 percent rule” as if it were a real thing. And many investors go along. Acknowledging the effect of valuations would mean coming to terms with the reality that our stock portfolios do not possess nearly the real and lasting value that we have been led to believe they possess. So we pretend.