A Rich Life

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

Rob Bennett to Academic Researcher Wade Pfau: “If I Can Think of Things That I Can Do To Soften the Blow to the Goons…I Will Do That… If It Is Any Comfort, I Think It Would Be Fair to Say That the Goons Are Losing Power and Influence BY THE DAY.”

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Yesterday’s blog entry reported on an e-mail sent to me by Academic Researcher Wade Pfau on May 16, 2011. I sent a response the following day.

Wade:

It’s a revolutionary statement. You are telling the truth about safe withdrawal rates. Every advance that we have achieved over the past nine years started with my decision to tell the truth re SWRs in my May 13, 2002 post. It may be that you cannot see today where this is going to lead you in time. As  someone who has already made a good bit of the journey, I can tell you that it is going to take you to some amazing places.

Yes, of course I have been saying this for nine years now. But who am I? I am some guy whose claim to expertise in this field is that I figured out how to get posts to appear at internet discussion boards. My words have power to those who see them. Not too many see them. You are positioned to be able to publish peer-reviewed research. You have the potential to have far more influence.

I of course have no more desire to antagonize the Goons than you do. But the reality obviously is that they ARE antagonized by honest posting on these matters. So that aspect of this is a problem.

My intent was very much to focus on your name (and on Bogle’s name) since it is the fact that you are saying these things (and that, as you note, Bogle has offered important support for the core ideas) that is the news here. I am going to have to give some thought as to whether there is a  “soft” way to report this. It won’t work to say only that there is a “new academic study.” I need to give a link to the study for the story to make any sense at all. And, if I give a link, the Goons will be upset with you.

My guess is that I am going to play it the way I planned. My plan was to include your name (and Bogle’s name) in the headline but to offer only limited commentary. I would quote the key paragraph of your blog post (the one I quoted in my comment at your blog) and I would quote from my comment and perhaps from my e-mail to you from yesterday (I presume that you would prefer that I not quote from your e-mail below and I have no problem with that, so I will leave that out of it) and generally leave it at that. If I can think of other things that I can do to soften the blow to the Goons while still making the essential point that there are today people of influence in this field making public statements about the analytical errors contained in the Old School SWR studies, I will do that. But my guess is that I am not going to be able to tell the story that needs to be told without saying at least that much.

If it is any comfort, I think it would be fair to say that the Goons are losing power and influence BY THE DAY. There was a time when I was blacklisted at every major personal finance blog. Today I am having the experience of bloggers COMING TO ME and asking me to write guest blogs. This is a big change. People are having increasingly serious doubts about the Buy-and-Hold mumbo jumbo. About the only thing people are not willing to go along with today are direct and clear statements about the Ban on Honest posting. I believe that a big part of the concern there are the lawsuits that we are likely to see in days to come. But the wall is eroding. I believe that there will come a day in the not-too-distant future when you will be able to do your work in peace and not need to worry about the sorts of Internet Sewer Rats who have put up posts in “defense” of Lindauer and Greaney putting forward threats to destroy your career and all this sort of thing.

Please continue thinking through the implications of where your research leads. It takes time for it all to sink in. My sense is that you understand that your work is of great significance but that you do not today come close to appreciating just how revolutionary it truly is. That is going to come with time. You have caught a very large tiger by the tale, my good friend. I’m sure of it!

Do not hesitate to let me know if I say anything in the blog post or in the comments that follow that concerns you. I don’t think that is going to happen. But in the event that it does, I obviously want to do everything I can possibly do to keep things on a positive and constructive and life-affirming track.

Please take care.

Rob

Academic Researcher Wade Pfau: “If I Did Lack Personal Integrity, I Could Have Made This All Stop by Saying the Meaningless Sentence You Want So Desperately to Hear — ‘I Think the Errors in the Traditional Safe Withdrawal Rate Studies Must Be Corrected By Using Rob’s Analytically Valid Method’ “

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I have in recent weeks been reporting on my e-mail correspondence with Academic Researcher Wade Pfau. Wade posted a comment to the blog entry that I posted early this morning. The text is set forth below:

Hi Rob,

I forgot that I was still saying things like this even 2 weeks after the initial incident.

This was more than a year ago now, but I am thinking that I was just trying to explain politely to you that I’d rather have you quit writing about me, or at least stop using my name. I suppose that I figured the only way you might understand why is if I explained it in terms of your favorite conspiracy theories.

I will make one more attempt at a reality check for you. You go on and on about how I allegedly lack personal integrity because I allowed the Goons to threaten me into silence.

The reality is that though I may have for a brief moment got a bit too caught up in YOUR drama, I do not have any fears about the Goons.

The reality is that you are causing me 1000x more career damage than the Goons ever could have by filling Google with so much nonsense about me, and sharing embarrassing private details such as my overly ambitious journal submission strategies, etc. Those in particular are highly private. People don’t publicly share where they submit articles to unless those articles are accepted. You’ve violated my trust in so many countless ways and yet you still proclaim to be my friend.

And the further reality is that if I *did* lack personal integrity, I could have made this all stop just by saying the meaningless sentence you want so desperately to hear: “I think the errors in the traditional safe withdrawal rate studies must be corrected by using Rob’s analytically valid method.”

But I don’t believe that. I do not believe you have offered a valid correction to the safe withdrawal rate question. And I believe that retirement income strategies go much further than the question of a safe withdrawal rate. And so that is why I’ve had to endure your ongoing harassment for months on end now.

Usually I can figure out the Rob-logic behind what you are thinking, but I really don’t know how you think you come out of this whole episode looking like the good guy. I guess it is because you think you are saving my soul and putting me back on the path of righteousness, or something, huh? If only you had the power to do a little bit of self reflection…

Now that the whole email history is on display, we have the reminder of how angry you got at the very beginning when I referred to you as dogmatic. Yet, look at the way you’ve treated me for disagreeing with you on something which you don’t even understand. You quote numbers from JWR’s statistical work, but I’m not sure if you can even distinguish a mean from a median. So how can you be sure his work is right? I don’t know either, as I never did get around to digging into it, and I doubt I ever will now. But I’m not sure how a properly calculated lower confidence bound for a 2000 retiree could have been higher than zero.

Rob, suppose the stock market does drop 65% as you are expecting. It might happen, who knows.

Step 1: Stock Market Drops 65%

Step 2: ??

Step 3: Rob wins $500 million settlement from the Goons, the Goons are sent to prison, the investing public learns about and adopts VII.

What is Step 2? There isn’t one. You will still be in the same position as you’ve been in for the last 10 years. Why didn’t something happen for you after the 2008 financial crisis? You are like the guy who keeps predicting new ends for the world as each previous prediction date passes by.

That is why I’m telling you, from one human being to another, that it is time to move on. You are a smart guy, and you could use your talents for something productive. While warning people about the 4% rule is helpful, the way that you go about doing it is rather “catastrophically unproductive” as one wise fellow said to you years ago. I provide a loud voice that is critical of the 4% rule, and so spending your days assassinating my character is counterproductive to your underlying cause. So perhaps you can start fresh with a new issue of social import that carries less baggage for you. What happened in the past is a sunk cost, but you still have a chance to turn things around and start afresh today. And you can do all of this while still being honest and true to yourself.

My reaction to Wade’s words is set forth in the comments section of the earlier blog entry.

Academic Researcher Wade Pfau: “I Do Not Wish to Antagonize the ‘Goons’ Too Much… I Do Not Want Them Working Behind the Scenes To Derail Me…I Did Warn the Editor of the Journal of Financial Planning That They May Receive Some Hate Mail After I Mentioned Your Name in the Safe Savings Rate Paper””

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Yesterday’s blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on May 2, 2011. On May 16, 2011, Wade put a post to his blog endorsing the idea of permitting honest posting on safe withdrawal rates. He stated: ““Retirees now frequently base their retirement decisions on the portfolio success rates found in research such as the Trinity study. Studies such as those are fine for what they accomplish: they show how successful different withdrawal rate strategies were in the historical data. But it must be clear that this is not the information that current and prospective retirees need for making their withdrawal rate decisions.” I posted a comment to Wade’ blog expressing the view that: “This is the most important paragraph ever written about retirement planning, Wade.” I sent an e-mail to Wade that day. The text follows.

Wade:

Congratulations and thanks on your amazing SWR post!

I have gone into a bit more detail re my reaction in a comment that I just put to your blog

I would like to write this up at my blog tomorrow. Please let me know if you would prefer that I hold off or if there are any comments from your end (in addition to those that I can pull from your blog entry)
that you would like me to include in the write-up.

What a long, strange trip it’s been!

Rob

Wade responded later the same day. He thanked me but said: ” I don’t think I really said anything particularly new though.  It is the kind of thing you’ve been saying for years.”

Re the issue of whether the time was ripe for me to write about his study, he said: Sure, it is okay to discuss the blog, paper, etc. in your blog now. But, perhaps, you do not need to emphasize my name so much, or even at all.  It is okay to just refer to it as “a new academic study” etc. I do not wish to antagonize the “goons” too much, as I would like to reach a wider audience than them anyway, and I don’t want them working behind the scenes to derail me.”

He added that: “I did warn the editor of the Journal of Financial Planning that they may receive some “hate mail” after I mentioned your name in the safe savings rate paper. Maybe it didn’t happen after all, but it won’t be a big problem even
if it does happen now.”

Finally, he reported that Dan Moisand had just been elected to join the advisory panel of the Journal of Financial Planning. He noted that Dan had expressed an interest in writing a column for his “Financial Advisor” column on safe withdrawal rates and valuations.

Rob Bennett to Academic Researcher Wade Pfau: “The Safe Saving Rate Concept Can Effectively Compliment the Safe Withdrawal Rate Concept, But It Cannot Replace It. What Do You Do When Someone Notices That on Paper He Has Enough to Retire But in Reality He Is Nowhere Close (Because His Portfolio Is Temporarily Priced at Three Times Fair Value)?”

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Yesterday’s blog entry reported on an e-mail that Academic Researcher Wade Pfau sent to me on May 2, 2011. My response, sent the same day, is set forth below.

Wade:

Thanks much for the link. It’s no problem not to mention the article for a little bit of time. That’s trivial.

The Safe Saving Rate concept can effectively COMPLIMENT the safe withdrawal rate concept, but it cannot replace it. What do you do when someone who has never followed the Safe Saving Rate concept notices that on paper he has enough to retire but in reality he is nowhere close (because his portfolio is temporarily priced at three times fair value)? The properly calculated SWR tells the fellow what he needs to know. There’s got to be some tool we can use to warn people that, if they use unadjusted portfolio values to plan retirements, they will get killed. The natural choice is the safe withdrawal rate concept since the thing they are trying to figure out is whether a particular withdrawal rate is safe or not.

That said, there is separate value in the Safe Saving Rate concept. The SSR concept is giving people the long-view picture: How much do you need to save so that you will have a portfolio of sufficient size at the time you want to retire? The SSR concept is incorporating the temporary ups of overvaluation and the temporary downs of undervaluation into a single long-view number. Knowing that number certainly has value for planning purposes. But we still need to be able to tell people at the point of retirement whether they have saved enough or not. So we still need to be able to gain the ability to report the SWR accurately. And we certainly need to warn the millions who followed the discredited Old School studies and who are today likely in the process of seeing their retirements fail.

Kevin at the Out of Your Rut blog did a great job of addressing the underlying issue in clear terms in a comment that he put to my “Investing: The New Rules” column this morning:

Kevin: “A good friend of mine says that each of us has a certain “worldview”–a set of beliefs that makes the world go round, at least in our minds. When something happens or is said that disturbs that equilibrium, we lash out against it, desperate to establish that it isn’t true.”

That’s the real story, Wade. That’s the issue that everyone of us involved in some way in teaching people effective stock investing strategies in the year 2011 needs to be dealing with. Once we begin talking openly about the emotional pain that
the Buy-and-Holders are feeling, we can get over the hurdle that has been holding back progress for 30 years now. There is not one person alive who does not deep in his or her heart want to see that happen. We all just need to summon up the
courage and grace and love and honesty and community spirit needed to make it happen.

Please just keep fighting the good fight. My sense is that the work you are  doing is 20 times more important than you are able to realize today. Once we get to the other side of the Big Black Mountain, things just get better and better and better and better. It’s all downhill sledding once we collectively figure out how to say the words “I” and “Was” and “Wrong.” And we are getting closer to that wonderful turn in the history of our knowledge of how stock investing works all the time.

Rob

Academic Researcher Wade Pfau: “You Probably Shouldn’t Mention This (An Article Linking to The Retirement Risk Evaluator) for Awhile, Or Else Those Guys (the Greaney Goons) Will Send a Bunch of Nasty E-Mails to the Journal of Financial Planning Editors”

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Yesterday’s blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on May 2, 2011, after the Greaney Goons threatened to get him fired from his job for the “crime” of posting honestly on safe withdrawal rates. Wade responded the same day.

Wade reported that his safe savings rate article had been published in the Journal of Financial Planning. He noted that he included a link to The Retirement Risk Evaluator in a footnote. Wade observed: “It is a pity that you probably shouldn’t mention this for a while, or else those guys [the Greaney Goons] will send a bunch of nasty emails to the Journal of Financial Planning editors.”

Wade said of the article: “Perhaps this approach can replace SWRs, and since safe savings rates do incorporate valuations, as the revised published article makes clear, all is well.”

Rob Bennett to Academic Researcher Wade Pfau, After the Greaney Goons Threatened to Get Him Fired From His Job: “The Site Is Owned by Greaney. It Was Set Up Solely for the Purpose of Intimidating People Like You”

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Yesterday’s blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on May 1, 2011. In the e-mail, I tried to offer words of comfort to my friend, who was living in fear that the Greaney Goons would follow through on their efforts to get him fired from his job because he had posted honestly on safe withdrawal rates. I knew from our earlier correspondence that Wade is married and has at least one small child (this came up during the time there was a concern over a possible nuclear meltdown in Japan because Wade had particular concerns about what might happen to his wife, who was pregnant at the time). I sent  a follow-up e-mail the next day. The text is set forth below.

Wade:

I reread your e-mail this morning and noticed something that might suggest a misperception that needs to be cleared up. You ask that I not delete the thread at the Hocomania site. I have no ability to delete threads there. That site is owned by Greaney. It was set up solely for the purpose of intimidating people like you, people who have expressed some interest in uncovering the realities of what the historical data says.

For example, there was a time when we had many people participating at Bogleheads who thought that valuations should be considered in calculations of the SWR. They would analyze each thread at the Hocomania board and discuss strategies for destroying people who had expressed the view that valuations should be considered. They would talk about defamatory things they could all agree to say over at Bogleheads to get people not to like that poster or things that they could say the poster had said that would help to get the poster banned or organize campaigns to send e-mails to Morningstar to demand a ban. If  a reporter wrote an article, they would send e-mails to the reporter’s boss to try to get him or her fired. There was a time when they called a poster’s place of work to try to get that poster fired. Mel Lindauer would then put a link up at Bogleheads so that everyone knew that the person who had said that valuations should be considered was being “punished”  and understood what would be in store for them if they elected to “cross” Lindauer or Greaney by posting honestly on investing topics.

This is why I often note that there is a Ban on Honest Posting on SWRs in effect at Bogleheads and many other sites today. This group uses Google searches to find out each day if there is anyone posting honestly about SWRs or other important investment-related topics and then sends their Goon Squads in to deal with the matter. As I said in the earlier  e-mail, this has been going on for nine years now. Given the huge legal liabilities they have run up, there is precisely zero chance that they will stop of their own accord, in my assessment.

I have no way of knowing precisely how much of the background of all this you know about. I have been presuming that, since you have seen Drip Guy’s behavior and Lindauer’s behavior, you had the general idea. Your comment about me
deleting a thread led me to believe that you might be thinking that I have some sort of ownership interest in that board. I have opposed the Campaign of Terror against our board communities going back to May 13, 2002. I put a post to Motley Fool demanding Greaney’s removal on November 23, 2002 (this was after he put up a post threatening to kill family members of any community members who posted honestly on the SWR matter). I post at that board only to correct the record to the extent I can and to answer questions that the Goons have (even the Goons would benefit from understanding the realities of stock investing and there have been rare cases where they have asked sincere questions). I have zero authority to delete threads at the Hocomania board.

The Bogleheads board at one time had a reputation for not encouraging lots of abusive posting. When the Goons showed up, a number of long-timers there asked where the Goon posters were coming from. I put up a post describing Greaney’s tactics and Lindauer’s role of linking to Greaney’s board each time a new poster dared to post honestly. I also contacted Morningstar about the matter and offered to send them e-mails each time Lindauer linked to the Greaney board. The Morningstar admins did not respond to the e-mail. Lindauer has said that “higher-ups” at Vanguard follow the board closely and know what goes on at it. The threatening threads were a daily occurrence during the years when I posted there. It was my May 13, 2002, post at Motley Fool that first noted the analytical errors in the Old School studies. So the Goons knew from my first post at Bogleheads that I would be posting honestly and started a smear campaign on the first day.

The Bogleheads board was launched for the purpose of blocking any possibility of honest posting. There had been numerous posters arguing that honest posting should be permitted back when the board was located at Morningstar.com. The smear campaigns caused many good people to leave but some soldiered on. The idea of moving to Bogleheads.org was to no longer have to operate under the Morningstar admins, who had not taken action in response to the smear campaigns but who had also not been wiling to ban those posting honestly, as the Lindauer and Greaney Goons demanded. Today they can of course ban anyone who comes to represent any sort of threat. So you no longer see discussions of whether honest posting on SWRs should be permitted or not.

I hope that background helps you make a little bit better sense of this. If ever there is a time when you have questions about the history, please don’t hesitate to ask. For good or for ill, I’ve had a front-row seat going back to the first day.

Rob

Rob Bennett to Academic Researcher Wade Pfau on Hearing of His Fears that the Greaney Goons Will Carry Through on Their Threats to Get Him Fired From His Job: “Please Don’t Delude Yourself Into Thinking That There Is Anything More Than a Zero Chance That ‘This Stuff Will Blow Over Soon’….This Has Been Going on for Nine Years.”

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Yesterday’s blog entry reported on an e-mail sent to me by Academic Researcher Wade Pfau on May 1, 2011, in which he described his fears of getting fired because of the threats made by the Greaney Goons to contact his employer with defamatory comments as their way of “punishing” Wade for having posted his honest views on the need for the Old School safe withdrawal rate studies to be corrected now that there is a consensus in the field that they get the numbers that millions of middle-class people have used to plan their retirements wildly wrong. I sent my response later the same day. The text is set forth below.

Wade:

Thanks for your kind (and troubling) note.

I will of course honor your wishes re the matters you refer to below.

The concern you are expressing is so insane that I am tempted not to take it seriously. The other side of the story, of course, is that I have had similar things done to me on scores of occasions and I have seen similar  things done to many others. So the full reality is that the concern you evidence is only in an objective sense insane and in the context in which it is being raised here entirely real.

Please don’t delude yourself into thinking that there is  anything more than a zero chance that “this stuff will blow over soon and those guys will forget about it and move on to the next thing.” This has been going on for nine years.

It would have been far, far easier to let it go when it all could have been easily characterized as a well-intentioned mistake. We now have s situation where hundreds of reputations are at jeopardy and where tens of thousands of lawsuits are likely to be filed once middle-class investors hear the story. I obviously wish that I could wave a magic wand and take us back to the morning of May 13, 2002. But none of us possess that power. All responsible people caught up in this (I think
it is fair to say that that includes all responsible people living in free-market economies today) need to accept the cards we have  been dealt and take whatever steps we can to bring things to a good and positive and life-affirming resolution for every single person (including those on “the other side”) as possible.

I believe that our hope lies in the fact that everyone deep down inside wants the same thing. There are of course some who  tell themselves that they do not want a resolution. But deep down  inside they do. They have painted themselves into a corner and are not capable of letting in the full horror of what they have done. We have to extend the hand of kindness while also insisting on the right to do honest and positive work and not to degrade ourselves or participate in the degradation of others. We need to combine love and honesty in the proper proportions.

I’ll always do anything I can to take things to a positive place. I don’t know if you believe in God or not, but, if you do, this is  a time to call on that belief for comfort that a positive resolution of this matter really is possible. I (somewhat stubbornly) believe that it is. John Walter Russell used to tell me “I’ve put it in God’s hands and i know it will eventually work out better than anyone can today imagine.” John had a stronger faith than I did. But I have just enough to see that there might be something to what he said.

I am horrified to think that I have even in the most indirect way caused you to feel anxiety over how things might proceed. I apologize for that. I hope that you possess at least some understanding of the huge importance of the research you have already done (to say nothing of what you are obviously capable of doing in the future). My dream is that there will be a day when the pain you have been put through here pays huge dividends (I of course dream that the same will someday be true for me and my family).

Please keep your chin up and stay optimistic. The potential good here is 500 times bigger than the small-minded stuff. There’s got to be a way to make the good stuff happen and make the ugly stuff go away. We will find it together (I don’t mean just you and me but the entire community of investors and people living in free-market economies in general).

Please let me know if there are any promising avenues that you discover or any questions or concerns that you would like to direct to me. If you ever think I am walking an ill-chosen path, I would be grateful if you would let me know. I obviously don’t always get it all right. I need to count on my friends to steer me back to a better path when I take wrong steps.

Please take care.

Rob

Academic Researcher Wade Pfau to Rob Bennett: “You Really Shouldn’t Have Posted My Private E-Mails. This Is So Unethical.”

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I have for several weeks been reporting at my blog on my 16-month e-mail correspondence with Academic Researcher Wade Pau. The most recent blog entry (posted this morning) was titled: Academic Researcher Wade Pfau (In Response to a Threat by the Greaney Goons to Get Him Fired From His Job for Posting Honestly on Safe Withdrawal Rates): “I Think I Should Stay Publicly Quiet for Awhile As I Really Don’t Want Anyone Sending Messages About Any Topics to Officials at My University.” Wade posted his reaction to the blog entry as a comment to it. His words are set forth below:

Rob,

After months of trying to prop yourself up at my expense, and showing such utter lack of personal integrity in posting the contents of my private emails when I explicitly asked you not to, you’ve finally gotten to your big payoff: the “proof that I’ve been threatened into silence.”

Let’s back up:

-As this whole email history reminds, I was always somewhat confused about your position. I now realize you believe that market valuations can be used to better identify a “safe withdrawal rate.” But I don’t think so. The U.S. experience has been rather unique, and the relationship between past market valuations and withdrawal rates in the U.S. is not necessarily indicative about future withdrawal rates. There is even less historical data to link valuations to safe withdrawal rates than there this is to simply look at what withdrawal rates worked in the past.

-The Trinity study came about as an offshoot of research by financial planners. But financial economists had long known there is no such thing as a safe withdrawal rate from a portfolio of volatile assets, well before the Trinity study was ever written. This means that you didn’t discover anything that wasn’t known before. It is dishonest for you to pull out all these 1.5 year old quotes from me and ignore what I’ve learned and said since then.

-Your blog post today refers to a heated exchange that DRiP Guy and I had at Bogleheads in April 2011. And do you recall what the outcome of that exchange was? That is when I realized that he was right about this whole matter. And so I did not write to the Trinity authors to ask for a correction, I wrote to apologize to them for being too publicly critical of their study, but to also point out some reasons why the limited U.S. historical data may not really be sufficient to have a clear idea about the safe withdrawal rate. I told you that before.

-I’ve said the Trinity study is not helpful for new retirees. You’ve said that this doesn’t go far enough because the study needs to be corrected. But what you really mean is: you want to become rich and famous and you think this will happen if there is a formal process to republish old studies acknowledging you for “discovering” an “error” in them and providing your proposed “correction.” Since you are wrong about the “error” and the “discovery” and the “correction,” I’m not sure how successful you are going to be with this plan.

-Now about this job threat business. You’ve accused DRiP Guy of calling my employer and all sorts of other oddities, but why don’t you just provide a link so that people can judge the accusation for themselves:

http://boards.fool.com/hocus-gets-college-prof-to-question-swr-studies-29265775.aspx?sort=whole

This was still a period of uncertainty about what would happen in Japan after the Great Kanto earthquake the month before, and a new president had also just been installed at my university indicating a shift in power away from the group that had hired me. So you have here what looks like your big triumph… proof I’ve been silenced. However, I quickly recovered from my initial concern and realized that the whole thing was ridiculous. Anyway, there is no threat there. intercst knows how to push your buttons. That’s all. I wouldn’t lose my job even if people did complain about me, and as far as I know, no one ever did email or call my employer. My research has not been impacted by any alleged threats, and it is really insulting and disgusting all of the times you’ve suggested otherwise. And I was still peeved that you misrepresented why I emailed the Trinity authors, which is what caused the whole issue in the first place.

-You owe Mr. Bengen an apology, because it does look like the 2000 retirees are going to be okay after all with 4%. We are getting far enough along in their retirements to see this. While that doesn’t mean that 4% was safe ex ante, it does mean that he did not cause millions of failed retirements, as you’ve explicitly suggested before.

-Finally, you shouldn’t have posted my private emails. That is so unethical. And it really doesn’t help to build you up. Posting my outdated private emails will only give second thoughts to anyone in the future who might have been willing to give you the benefit of the doubt.

I’m not going to get into a back and forth with you about this. I already know your response. You will be outraged. You will suggest that I’ve turned my back on average Americans and sold out to Wall Street. You will remind us all that you’ve been a victim of death threats. You will say that we could have discussions about all of these diverse viewpoints if only some internet discussion boards would be opened to honest posting. You will say that you discovered errors in the 4% rule and that those with a vested interest in preserving 4% have terrorized you for trying to get past studies corrected. As such, you will ignore everything I wrote above. You will just spin my comment as proof that I’m really afraid to speak truthfully. You will do this all in a very long series of comments which may approach 10,000 words in total. But it’s all so tiring and implausible. Please don’t spend your day doing this. Go play with your kids. It’s time to move on.

Academic Researcher Wade Pfau (In Response to a Threat by the Greaney Goons to Get Him Fired From His Job for Posting Honestly on Safe Withdrawal Rates): “I Think I Should Stay Publicly Quiet for Awhile As I Really Don’t Want Anyone Sending Messages About Any Topics to Officials at My University”

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Yesterday’s blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on April 5. 2011. I sent Wade an e-mail on April 18, 2011, reporting that The Returns Sequence Reality Checker had been released.

Wade said that the calculator looked great. He asked: “Have you been following the Trinity study thread at Bogleheads? DRiP Guy had a bit of a temper tantrum over the weekend” I responded that: “Things move forward at an exceedingly slow pace. But I did detect forward motion” in that thread.

Wade was during this time-period posting occasionally at my blog.  A number of articles were published in this time-period acknowledging ten years later that I was right in my May 13, 2002, post, that the Old School safe withdrawal rate studies really do get all the numbers wildly wrong because they do not include an adjustment for the valuation level that applies on the day the retirement begins. I wrote in a blog entry that the Old School studies should be corrected.  I explained that financial planners had been using the infamous “4 Percent Rule” for years and that millions of middle-class investors will be experiencing failed retirements in days to come and that we should all do everything possible to get the word out and help as many people as we can. Wade at first expressed reluctance to acknowledge the obvious merit of this idea. But, after some discussion, he agreed that the Old School studies should be corrected. He said that he would write an e-mail to the authors of the Trinity Study seeking a correction.

The Greaney Goons responded by putting forward posts at a thread at the Goon Central board threatening to get Wade fired from his job by sending defamatory comments to his employer. Wade sent me the following e-mail on May 1, 2011:

Hi Rob,

Thanks for the comments on my blog, and also your new article about the Fisher and Statman study is very nice.

I think I should stay publicly quiet for a while, as I really don’t want anyone sending messages about any topics to officials at my university.  They will not care about who is right or wrong, especially as they will not care about US retirement planning issues anyway, but they just don’t like any topic of controversy or problems. Hopefully this stuff will blow over soon and those guys will forget about it and move on to the next thing before any further escalation occurs.

But would you mind, at least for the next week or so, to not mention my name anymore on your blog, and to also completely ignore the “Wade Pfau Contacts Trinity Authors” thread at the Hocomania site.  I hope that thread can quickly move down the list into the archives.  At the same time, please do not delete it either, as that would surely be noticed by someone.

By the way, please do not mention this publicly, but just to let you know, I haven’t heard back from any of the Trinity authors yet.

Best wishes, Wade

“It’s the Most Extraordinary Thing I Have Ever Seen. The Moon Landing Is a Very Distant Second.”

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Yesterday’s blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on March 21, 2011. Wade’s next e-mail arrived on March 28, 2011.

Wade offered his assessment of the Returns Sequence Reality Checker in this e-mail.

I had asked if the concept made sense. He said:  “Yes, indeed. You are making a good point with the spreadsheet.”

We exchanged a number of e-mails relating to technical points re the building of the calclualtor.

On April 5, 2011, Wade sent me an e-mail titled “Classy Discussion” with a link to the Early Retirement Forum:

http://www.early-retirement.org/forums/f28/safe-savings-rates-a-new-approach-to-retirement-planning-over-the-lifecycle-55545.html

The discussion thread at the link includes numerous defamatory comments about me (the forum banned honest posting on the safe withdrawal rate topic after I reported on the errors in the Old School studies and the Greaney Goons threatened to burn the entire site to the ground unless honest posting was banned). It contains a comment arguing that, since Wade has agreed to associate with someone with a long history of posting honestly on safe withdrawal rates, he should be treated as possessing “zero credibility.”

I responded the same day. The text of my response follows.

Wade:

Thanks for letting me know.

There’s a serious issue here. This is not normal human behavior. Buy-and-Holders are in serious emotional pain.

Investment professionals need to write about this aspect of things more often. People shy away from the subject. But we don’t solve it by shying away from it. Emotions matter.

I of course would like to see people speak up at that board in favor of a lifting of the ban on honest posting. But how do you think you would feel if you were one of those who had insisted on the ban some years back? As a society, we have created a huge problem. As delicate as this matter is, we are going to need to work through it as a society in days to come.

That’s my take, in any event. It’s the most extraordinary thing I have ever seen. The moon landing is a very distant second.

Rob