Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

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iamblessed
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Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by iamblessed »

portfolio?
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iamblessed
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by iamblessed »

That's great Thanks so much. Just what I was looking for.
Jaymover
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by Jaymover »

Wow. If it was a $million and living on about $40K a year would have been sweating about losing money between 2000 and 2008 and then miraculously been getting even richer post GFC. Just go 100 percent S&P. Awesome!
Last edited by Jaymover on Sat May 15, 2021 9:21 am, edited 1 time in total.
Triple digit golfer
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by Triple digit golfer »

I'm dense. What's the difference between the two? Is the first 5% of the current year's beginning balance and the second is the traditional 5% of the original $100k, but adjusted for inflation each year?
Normchad
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by Normchad »

Triple digit golfer wrote: Sat May 15, 2021 9:20 am
I'm dense. What's the difference between the two? Is the first 5% of the current year's beginning balance and the second is the traditional 5% of the original $100k, but adjusted for inflation each year?
I think the first is 5% of the current portfolio balance each year.
And the second is just a fixed 5000 each year.

Neither of which is the 4% concept, of 4% of the initial balance at retirement, adjusted annually for inflation.
Triple digit golfer
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by Triple digit golfer »

Normchad wrote: Sat May 15, 2021 9:24 am
Triple digit golfer wrote: Sat May 15, 2021 9:20 am
I'm dense. What's the difference between the two? Is the first 5% of the current year's beginning balance and the second is the traditional 5% of the original $100k, but adjusted for inflation each year?
I think the first is 5% of the current portfolio balance each year.
And the second is just a fixed 5000 each year.

Neither of which is the 4% concept, of 4% of the initial balance at retirement, adjusted annually for inflation.
Ah, got it! Thank you.
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iamblessed
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by iamblessed »

Interesting the guy that did the variable 5% ended up worth more after 20 years than the standard 4% rule.
Soon2BXProgrammer
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by Soon2BXProgrammer »

iamblessed wrote: Sat May 15, 2021 9:54 am Interesting the guy that did the variable 5% ended up worth more after 20 years than the standard 4% rule.
That's only because they cut hard when the portfolio was down and the variable 5% gets shorted when inflation is higher then the portfolio growth..
Chartered Financial Consultant (ChFC®) -- However I am not your advisor.
mmcmonster
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by mmcmonster »

iamblessed wrote: Sat May 15, 2021 9:54 am Interesting the guy that did the variable 5% ended up worth more after 20 years than the standard 4% rule.
But a standard 5% rule would have failed at 17 years. :shock:
pkcrafter
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by pkcrafter »

iamblessed wrote: Sat May 15, 2021 9:54 am Interesting the guy that did the variable 5% ended up worth more after 20 years than the standard 4% rule.
Yes, but the calculation began with 1MM, so the first withdrawal for each method was $5000/year. But in the second year, the variable withdrawal was not $5000, it was 5% of the portfolio balance, so over time, the annual withdraw was less than $5000. The $5000/year regardless of portfolio value depleted the portfolio quite a bit.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
mmcmonster
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by mmcmonster »

iamblessed wrote: Sat May 15, 2021 9:54 am Interesting the guy that did the variable 5% ended up worth more after 20 years than the standard 4% rule.
The variable percentage rate portfolio mathematically "can't fail". Logically that makes sense, using Zeno's Paradox. If you take a fixed percentage of what you currently have, you will never reach zero. Of course, you may end up living on $5 per year. :oops:

For instance, this is variable 10% per year: https://www.portfoliovisualizer.com/bac ... ion1_1=100
pkcrafter
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by pkcrafter »

pkcrafter wrote: Sat May 15, 2021 10:07 am
iamblessed wrote: Sat May 15, 2021 9:54 am Interesting the guy that did the variable 5% ended up worth more after 20 years than the standard 4% rule.
Yes, but the calculation began with 1MM, so the first withdrawal for each method was $5000/year. But in the second year, the variable withdrawal was not $5000, it was 5% of the portfolio balance, so over time, the annual withdraw was less than $5000. The $5000/year regardless of portfolio value depleted the portfolio quite a bit. This analysis of past performance provides no accurate result for the next 20 years.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
rich126
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by rich126 »

pkcrafter wrote: Sat May 15, 2021 10:07 am
iamblessed wrote: Sat May 15, 2021 9:54 am Interesting the guy that did the variable 5% ended up worth more after 20 years than the standard 4% rule.
Yes, but the calculation began with 1MM, so the first withdrawal for each method was $5000/year. But in the second year, the variable withdrawal was not $5000, it was 5% of the portfolio balance, so over time, the annual withdraw was less than $5000. The $5000/year regardless of portfolio value depleted the portfolio quite a bit.

Paul
Just to clarify for the "casual skimmers" of this thread. 5% of $1M is actually $50,000 and not $5,000. However at least one of the links above shows a starting value of $100,000 and not $1M so the $5,000 is correct in terms of that link but not correct if you had started with $1M, otherwise we'd be talking about a very SWR of 0.5% :)
ruud
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by ruud »

Soon2BXProgrammer wrote: Sat May 15, 2021 9:56 am
iamblessed wrote: Sat May 15, 2021 9:54 am Interesting the guy that did the variable 5% ended up worth more after 20 years than the standard 4% rule.
That's only because they cut hard when the portfolio was down and the variable 5% gets shorted when inflation is higher then the portfolio growth..
To add to this, look at the "annual withdrawals" graph at the bottom of the page. In particular, the annual withdrawal during 2008 was less than half of what it was in the first year.
.
pkcrafter
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by pkcrafter »

pkcrafter wrote: Sat May 15, 2021 10:11 am
pkcrafter wrote: Sat May 15, 2021 10:07 am
iamblessed wrote: Sat May 15, 2021 9:54 am Interesting the guy that did the variable 5% ended up worth more after 20 years than the standard 4% rule.
Yes, but the calculation began with 1MM, so the first withdrawal for each method was $50,000/year. But in the second year, the variable withdrawal was not $5000, it was 5% of the portfolio balance, so over time, the annual withdraw was less than $5000. The $5000/year regardless of portfolio value depleted the portfolio quite a bit. This analysis of past performance provides no accurate result for the next 20 years.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
pkcrafter
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by pkcrafter »

rich126 wrote: Sat May 15, 2021 10:40 am
pkcrafter wrote: Sat May 15, 2021 10:07 am
iamblessed wrote: Sat May 15, 2021 9:54 am Interesting the guy that did the variable 5% ended up worth more after 20 years than the standard 4% rule.
Yes, but the calculation began with 1MM, so the first withdrawal for each method was $5000/year. But in the second year, the variable withdrawal was not $5000, it was 5% of the portfolio balance, so over time, the annual withdraw was less than $5000. The $5000/year regardless of portfolio value depleted the portfolio quite a bit.

Paul
Just to clarify for the "casual skimmers" of this thread. 5% of $1M is actually $50,000 and not $5,000. However at least one of the links above shows a starting value of $100,000 and not $1M so the $5,000 is correct in terms of that link but not correct if you had started with $1M, otherwise we'd be talking about a very SWR of 0.5% :)
Whoops, missed a zero. Thanks for catching that--now corrected.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
ScubaHogg
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by ScubaHogg »

You might be interested in this ongoing thread where willthrill81 is tracking in real time how well a 2000 retiree would be doing using a 4% rule withdrawal system

viewtopic.php?t=237334
“Unexpected Returns dominate the Expected Returns” - Ken French
FactualFran
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Re: Is there a website that would show taking 5% out of the S&P 500 starting in the year 2000 what would happen to the

Post by FactualFran »

Normchad wrote: Sat May 15, 2021 9:24 am
Triple digit golfer wrote: Sat May 15, 2021 9:20 am
I'm dense. What's the difference between the two? Is the first 5% of the current year's beginning balance and the second is the traditional 5% of the original $100k, but adjusted for inflation each year?
I think the first is 5% of the current portfolio balance each year.
And the second is just a fixed 5000 each year.

Neither of which is the 4% concept, of 4% of the initial balance at retirement, adjusted annually for inflation.
The (fixed 5% - $5000/yr) example had an annual inflation adjustment. Changing the Withdrawal Amount on that web page to $4000 gives Analyze Portfolios results for an initial withdrawal rate of 4%.
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