But then I noticed that the "DIY Withdrawal Rate Toolbox" at earlyretirementnow.com said the same allocation would be only 2.7%.
A HUGE 2% difference!
I sent the guy the following comment:
His response was:Are you familiar with the SWR calculator at https://portfoliocharts.com/portfolio/withdrawal-rates/ ? I was really surprised at how drastically different your results were for a 25% Stock, 25% Bond, 25% Cash, 25% Gold portfolio was. Their SWR was 4.7%, yours was 2.7%. Yours seems suspiciously low considering that even their Perpetual Withdrawal Rate was 3.8%. Any thoughts on what could be causing this ENORMOUS difference?
It is amazing how 2 viewpoints (both of which seem pretty valid) can make such an enormous impact. Is it fair to count those years? Is it fair to exclude them? What about gold? Is it fair to exclude a gold price that was fixed? After all, if gold ever became substantially important again, it would not be surprising to see the price artificially manipulated again.The difference is due to the other calculator using only the 1970-current interval. If you remove the two worst episodes (1929 + 1965-68) you get higher SWRs.
But that’s not very comforting! It’s like estimating the probability that you’ll get into a traffic jam by looking at traffic patterns only between 1 and 3 am!
Here are the links:
https://earlyretirementnow.com/2018/08/ ... s-part-28/