If an SWR is just that, how come time of retirement can make so much difference?

MK62

Deleted_User said:

Seems to be mixing of the “bucket” and “SWR” strategies in the comments.

If one “withdraws” and keeps money in cash, all he has achieved was to change asset allocation.  Cash is part of the fixed income portion of the overall portfolio.

My view is that cash is an asset class of it's own - and for the purposes of drawdown planning I'd also consider income from DB pensions, annuities and state pension etc, as cash too (or cash streams), since they carry no investment risk and are guaranteed (as far as anything can be guaranteed that is).
As for changing asset allocation, if the aim is to keep X years of income as cash, then as the portfolio dwindles during drawdown, the cash allocation would need to rise, both in £ and in % terms, so the overall asset allocation has to change......unless the aim of keeping the cash on hand is different.

[Deleted User]

MK62 said:

Deleted_User said:

Seems to be mixing of the “bucket” and “SWR” strategies in the comments.

If one “withdraws” and keeps money in cash, all he has achieved was to change asset allocation.  Cash is part of the fixed income portion of the overall portfolio.

My view is that cash is an asset class of it's own - and for the purposes of drawdown planning I'd also consider income from DB pensions, annuities and state pension etc, as cash too (or cash streams), since they carry no investment risk and are guaranteed (as far as anything can be guaranteed that is).
As for changing asset allocation, if the aim is to keep X years of income as cash, then as the portfolio dwindles during drawdown, the cash allocation would need to rise, both in £ and in % terms, so the overall asset allocation has to change......unless the aim of keeping the cash on hand is different.

Great. But its not SWR which is based on a constant asset allocation. 

MK62

Deleted_User said:

 

While SWR is a mirage, safety is achievable by having DB/annuity-like income to cover the basics and realizing that investment withdrawal rate will have to vary. 

Neither is that....

[Deleted User]

MK62 said:

Deleted_User said:

 

While SWR is a mirage, safety is achievable by having DB/annuity-like income to cover the basics and realizing that investment withdrawal rate will have to vary. 

Neither is that....

Of course not.  Because SWR does not exist and the notion itself is harmful and misleading

NedS

Deleted_User said:

MK62 said:

Deleted_User said:

 

While SWR is a mirage, safety is achievable by having DB/annuity-like income to cover the basics and realizing that investment withdrawal rate will have to vary. 

Neither is that....

Of course not.  Because SWR does not exist and the notion itself is harmful and misleading

Perhaps if they had called it "Starting Withdraw Rate"?