steves wrote:These SWR pros badly over-simplify things.
No, they don't. They don't claim or try to compete with your software either. Get over it
I had to read all the way to the end to discover that the 4% rule
still has value as an investment planning tool
even if it isn't some immutable law
or iron-clad warranty
So what should we make of a 4% rule that is based on a process that fails to hedge longevity risk, may be overly conservative and spends a fixed amount each year regardless of investment experience? We should recognize that this approach was useful in beginning the conversation about optimal withdrawal rate strategies [my bold], but science is all about constantly improving on old techniques. Best practices mean changing with the times.
Was—and still is. But like any rule, it's only a starting point that remains useful to anyone who's thinking about how much they should plan to set aside in order to fund their retirement.
Does it address all the issues? No. Nor does it claim to.
Does it have flaws? Yes.
Is it useful, nevertheless? You betchya.
When I learned to drive I was taught to leave a car length behind the vehicle ahead for every 10 m/h (~16 km/h) speed. It wasn't meant as an immutable law. Everyone knew it had flaws, e.g. it wasn't enough in wet/icy weather, it wasn't practical in heavy traffic where such other drivers would quickly fill such a large void, etc. But as a general rule in the absence of anything better, e.g. an onboard collision avoidance system
, applied with some common sense, it's served me well for several decades—just as 4% SWR has.
Sedulously eschew obfuscatory hyperverbosity and prolixity.