Row 26550

Row ID: 26550 | Dataset Entry | Axioma AXP Content Repository

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This page contains data entry 26550 from the Axioma AXP content repository. The structured data below represents the complete record for this entry.

OK, technically, no it's not "designed" to do that but in the vast majority of cases it will do that. The point is the expected median result is way in excess of the worst case result, and what the SWR *is* designed to do is to protect you even in that worst case scenario. Bengen stated this, that 4% was to cover the worst case scenario, where someone retires at the very top of a bull market and then faces a protracted bear market with high inflation.

The difference between "balance did not go below 0 in 30 years in the worst case scenario" and "keeps principal intact" is not very great, if it will do the former, it will also do the latter in the vast majority of cases, more cases than it won't. There's only a relatively narrow sliver of scenarios between "goes to $1 over 30 years" and "keeps principal intact over 30 years" and most scenarios, if you guarantee if won't be used up over the period, it will actually increase significantly.

While with an annuity, you are *guaranteed* from the start your principal goes to $0.

It's hardly "besides the point". The whole point I'm making here is that $1,000,000 in principal is actually worth more than an annuity of $40k a year. They are not directly equivalent, the expected value of the lump sum is significantly higher. Which would you take? And if your argument is that they are exactly the same, would you take an annuity of $45k/year over $1m?

FieldValue
text OK, technically, no it's not "designed" to do that but in the vast majority of cases it will do that. The point is the expected median result is way in excess of the worst case result, and what the SWR *is* designed to do is to protect you even in that worst case scenario. Bengen stated this, that 4% was to cover the worst case scenario, where someone retires at the very top of a bull market and then faces a protracted bear market with high inflation. The difference between "balance did not go …
label r/investing
dataType comment
communityName r/investing
datetime 2024-05-21
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Raw Record

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  "text": "OK, technically, no it's not \"designed\" to do that but in the vast majority of cases it will do that. The point is the expected median result is way in excess of the worst case result, and what the SWR *is* designed to do is to protect you even in that worst case scenario. Bengen stated this, that 4% was to cover the worst case scenario, where someone retires at the very top of a bull market and then faces a protracted bear market with high inflation.\n\nThe difference between \"balance did not go below 0 in 30 years in the worst case scenario\" and \"keeps principal intact\" is not very great, if it will do the former, it will also do the latter in the vast majority of cases, more cases than it won't. There's only a relatively narrow sliver of scenarios between \"goes to $1 over 30 years\" and \"keeps principal intact over 30 years\" and most scenarios, if you guarantee if won't be used up over the period, it will actually increase significantly.\n\nWhile with an annuity, you are *guaranteed* from the start your principal goes to $0.\n\nIt's hardly \"besides the point\". The whole point I'm making here is that $1,000,000 in principal is actually worth more than an annuity of $40k a year. They are not directly equivalent, the expected value of the lump sum is significantly higher. Which would you take? And if your argument is that they are exactly the same, would you take an annuity of $45k/year over $1m?",
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  "dataType": "comment",
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  "datetime": "2024-05-21",
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