Financial Independence Daily FI discussion thread - March 03, 2020

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Daily FI discussion thread - March 03, 2020 Posted: 03 Mar 2020 12:08 AM PST Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. submitted by /u/AutoModerator [link] [comments]

Is it safe to periodically “reset” your withdrawal rate, if it is low? Posted: 03 Mar 2020 11:44 AM PST Over a sixty year time period, based on the data I have seen, there is a 19% chance of a 75/25 portfolio with a 4% WR dropping below its inflation adjusted starting value, and a 15% chance of it going to zero. At 3.5% that becomes 7% and 2%. Because of this, the general wisdom of avoiding "resetting" your WR makes sense, as you're massively increasing the risk of that rare adverse SORR. At 3% however, the failure rate is 0% and 0% respectively. With your portfolio based on historical data having never failed to not be worth more than when you started, adjusted for inflation, never mind go to zero, with a 3% WR, is it safe to periodically reset? One of Kitces pieces of work alludes to this strategy, but it doesn't flesh it out with data, or go into detail. I feel like I could be missing something glaringly obvious here. submitted by /u/JN324 [link] [comments]

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