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Have you analyzed your safe withdrawal rate? Do you think it is more or less than 4%? 3%? Let me know by leaving a comment when you’re done.ĭon’t miss an episode, hit that subscribe button… Why sequence of returns risk is front-loaded for early retirees but back-loaded for wage earners.How Social Security factors into your safe withdrawal analysis.
SHOCKINGLY SIMPLE MATH BEHIND EARLY RETIREMENT HOW TO
Why the business cycle in the year you retire is crucial to your safe withdrawal analysis, plus how to use the Shiller CAPE ratio to estimate your safe withdrawal rate.
Why sequence of returns risk and safe withdrawals rates are inextricably linked.The importance of analyzing the conditional probability of failure based on the actual year you retire.The fatal flaw of the “4% rule” and why you might easily run out of money in retirement if you follow it blindly.This is the most important financial planning concept early retirees must grasp to stay retired and guarantee they never have to go back to a j-o-b. So this week, I invited Karsten Jeske, PhD – a former professor, Fed economist, quantitative finance researcher, and early retiree – to the podcast to share insight on how to estimate your safe withdrawal rate in retirement. When it comes to early retirement the most important (and difficult) thing you have to grasp is your safe withdrawal rate.įIRE bloggers rave about “the shockingly simple math behind early retirement,” but they almost never talk about the shockingly un-simple math behind safe withdrawal rates.