SWR Question

Pat38493

Deleted_User said:

michaels said:

Deleted_User said:

michaels said:

Pat38493 said:

michaels said:

I find this tool useful as you can put in all sorts of other cashflows, lump sums etc and it tells you what your SWR (100%, 99%, 95% etc no failures) and annual DC withdrawals for a length of time you choose (I tend to use to age 95) would have been given your chosen asset split over the last 120 odd years.

An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) – Early Retirement Now

I was looking at this sheet this evening.  On the first sheet what is the meaning of the sections called “safe cons amounts conditional on S&P 500 drawdown”, with various columns for different % levels.  Is this relating somehow to the market performance during the start year or suchlike?

I think it is suggesting that if you start your drawdown during a period when the S&P has fallen back from its peak level then historically you would have been able to withdraw slightly more  (logically it sounds reasonable and helps with the situation where if you retire in a year when markets are high your big pot gives a high annual amount at a given SWR whereas if you retire a year later when markets are say down 20% then your safe withdrawal amount based on a percentage alone is also 20% smaller - ie if markets are not as 'high' then they are likely to perform 'better' going forward - of course it contradicts efficient market theory)

The problem is that “peaks” or only ever identifiable after falls. One could be waiting for a 20% drawdown for 10 years. 

Looking at the last 12 months, 12 months ago the S&P was at an all time max so on the table you could only choose the lowest SWR rate.  12 months later it is down 20% so in theory you could be safe with the slightly higher SWR rate.  This higher rate goes some way to make up for the fact that your pot is now 20% (depending on asset mix) smaller than it was 12 months ago so your actual SW currency amount does not reduce by as much as a strict SWR rule would imply.

It is not about waiting for a period of market retenchment so you can risk a higher withdrawal rate but more suggesting that if the market has fallen the SWR is higher but this will not go as far as meaning the swr amount does not decline when markets fall.

Of course this is all about the 'traditional' definition of SWR - the highest (fixed, inflation adjusted) withdrawal rate that would not have resulted in an unacceptable number of failure scenarios based on historic actuals.

End of Dec 2020 S&P500 traded at an all time high around 3800.  Today it’s trading around 4000, way off highs of about 4800 reached in December 2021.  Based on your approach a 60 year old starting retirement today can safely withdraw a lot more for life than his counterpart 2 years ago. Right? 

Based on the spreadsheet posted, yes but from what I saw it’s not “a lot more” it’s just a bit more.

[Deleted User]

Pat38493 said:

Deleted_User said:

michaels said:

Deleted_User said:

michaels said:

Pat38493 said:

michaels said:

I find this tool useful as you can put in all sorts of other cashflows, lump sums etc and it tells you what your SWR (100%, 99%, 95% etc no failures) and annual DC withdrawals for a length of time you choose (I tend to use to age 95) would have been given your chosen asset split over the last 120 odd years.

An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) – Early Retirement Now

I was looking at this sheet this evening.  On the first sheet what is the meaning of the sections called “safe cons amounts conditional on S&P 500 drawdown”, with various columns for different % levels.  Is this relating somehow to the market performance during the start year or suchlike?

I think it is suggesting that if you start your drawdown during a period when the S&P has fallen back from its peak level then historically you would have been able to withdraw slightly more  (logically it sounds reasonable and helps with the situation where if you retire in a year when markets are high your big pot gives a high annual amount at a given SWR whereas if you retire a year later when markets are say down 20% then your safe withdrawal amount based on a percentage alone is also 20% smaller - ie if markets are not as 'high' then they are likely to perform 'better' going forward - of course it contradicts efficient market theory)

The problem is that “peaks” or only ever identifiable after falls. One could be waiting for a 20% drawdown for 10 years. 

Looking at the last 12 months, 12 months ago the S&P was at an all time max so on the table you could only choose the lowest SWR rate.  12 months later it is down 20% so in theory you could be safe with the slightly higher SWR rate.  This higher rate goes some way to make up for the fact that your pot is now 20% (depending on asset mix) smaller than it was 12 months ago so your actual SW currency amount does not reduce by as much as a strict SWR rule would imply.

It is not about waiting for a period of market retenchment so you can risk a higher withdrawal rate but more suggesting that if the market has fallen the SWR is higher but this will not go as far as meaning the swr amount does not decline when markets fall.

Of course this is all about the 'traditional' definition of SWR - the highest (fixed, inflation adjusted) withdrawal rate that would not have resulted in an unacceptable number of failure scenarios based on historic actuals.

End of Dec 2020 S&P500 traded at an all time high around 3800.  Today it’s trading around 4000, way off highs of about 4800 reached in December 2021.  Based on your approach a 60 year old starting retirement today can safely withdraw a lot more for life than his counterpart 2 years ago. Right? 

Based on the spreadsheet posted, yes but from what I saw it’s not “a lot more” it’s just a bit more.

…but its a higher SWR percentage taken of a higher number as ones investments are up on two years ago.  

Pat38493

Deleted_User said:

Pat38493 said:

Deleted_User said:

michaels said:

Deleted_User said:

michaels said:

Pat38493 said:

michaels said:

I find this tool useful as you can put in all sorts of other cashflows, lump sums etc and it tells you what your SWR (100%, 99%, 95% etc no failures) and annual DC withdrawals for a length of time you choose (I tend to use to age 95) would have been given your chosen asset split over the last 120 odd years.

An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) – Early Retirement Now

I was looking at this sheet this evening.  On the first sheet what is the meaning of the sections called “safe cons amounts conditional on S&P 500 drawdown”, with various columns for different % levels.  Is this relating somehow to the market performance during the start year or suchlike?

I think it is suggesting that if you start your drawdown during a period when the S&P has fallen back from its peak level then historically you would have been able to withdraw slightly more  (logically it sounds reasonable and helps with the situation where if you retire in a year when markets are high your big pot gives a high annual amount at a given SWR whereas if you retire a year later when markets are say down 20% then your safe withdrawal amount based on a percentage alone is also 20% smaller - ie if markets are not as 'high' then they are likely to perform 'better' going forward - of course it contradicts efficient market theory)

The problem is that “peaks” or only ever identifiable after falls. One could be waiting for a 20% drawdown for 10 years. 

Looking at the last 12 months, 12 months ago the S&P was at an all time max so on the table you could only choose the lowest SWR rate.  12 months later it is down 20% so in theory you could be safe with the slightly higher SWR rate.  This higher rate goes some way to make up for the fact that your pot is now 20% (depending on asset mix) smaller than it was 12 months ago so your actual SW currency amount does not reduce by as much as a strict SWR rule would imply.

It is not about waiting for a period of market retenchment so you can risk a higher withdrawal rate but more suggesting that if the market has fallen the SWR is higher but this will not go as far as meaning the swr amount does not decline when markets fall.

Of course this is all about the 'traditional' definition of SWR - the highest (fixed, inflation adjusted) withdrawal rate that would not have resulted in an unacceptable number of failure scenarios based on historic actuals.

End of Dec 2020 S&P500 traded at an all time high around 3800.  Today it’s trading around 4000, way off highs of about 4800 reached in December 2021.  Based on your approach a 60 year old starting retirement today can safely withdraw a lot more for life than his counterpart 2 years ago. Right? 

Based on the spreadsheet posted, yes but from what I saw it’s not “a lot more” it’s just a bit more.

…but its a higher SWR percentage taken of a higher number as ones investments are up on two years ago.  

It seems like it yes- it seems like it uses the “drawdown” which seems to be the % drop since the last peak i.e. 16%.  You would then pick the corresponding column.  However in 2020, 2021 hadn’t happened yet so I guess the calculations could also be slightly different because of that reason too.  I’m a bit confused when you say the all time high in Dec 2020 was 3800 but in December 2021 it was 4800, which must also be an all time high then?  If the all time high is higher than the last “peak” I am not sure which % you would then take, which is kind of why I was asking in the first place.

michaels

Deleted_User said:

michaels said:

Deleted_User said:

michaels said:

Pat38493 said:

michaels said:

I find this tool useful as you can put in all sorts of other cashflows, lump sums etc and it tells you what your SWR (100%, 99%, 95% etc no failures) and annual DC withdrawals for a length of time you choose (I tend to use to age 95) would have been given your chosen asset split over the last 120 odd years.

An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) – Early Retirement Now

I was looking at this sheet this evening.  On the first sheet what is the meaning of the sections called “safe cons amounts conditional on S&P 500 drawdown”, with various columns for different % levels.  Is this relating somehow to the market performance during the start year or suchlike?

I think it is suggesting that if you start your drawdown during a period when the S&P has fallen back from its peak level then historically you would have been able to withdraw slightly more  (logically it sounds reasonable and helps with the situation where if you retire in a year when markets are high your big pot gives a high annual amount at a given SWR whereas if you retire a year later when markets are say down 20% then your safe withdrawal amount based on a percentage alone is also 20% smaller - ie if markets are not as 'high' then they are likely to perform 'better' going forward - of course it contradicts efficient market theory)

The problem is that “peaks” or only ever identifiable after falls. One could be waiting for a 20% drawdown for 10 years. 

Looking at the last 12 months, 12 months ago the S&P was at an all time max so on the table you could only choose the lowest SWR rate.  12 months later it is down 20% so in theory you could be safe with the slightly higher SWR rate.  This higher rate goes some way to make up for the fact that your pot is now 20% (depending on asset mix) smaller than it was 12 months ago so your actual SW currency amount does not reduce by as much as a strict SWR rule would imply.

It is not about waiting for a period of market retenchment so you can risk a higher withdrawal rate but more suggesting that if the market has fallen the SWR is higher but this will not go as far as meaning the swr amount does not decline when markets fall.

Of course this is all about the 'traditional' definition of SWR - the highest (fixed, inflation adjusted) withdrawal rate that would not have resulted in an unacceptable number of failure scenarios based on historic actuals.

End of Dec 2020 S&P500 traded at an all time high around 3800.  Today its trading around 4000, way off highs of about 4800 reached in December 2021.  Based on your approach a 60 year old starting retirement today can safely withdraw a lot more for life than his counterpart 2 years ago. Right? 

As mentioned, it is not my approach but yes based on the historic data record.  Of course we all know that this is very limited in terms of whether it represents enough distinct periods to be statistically useful.

Pat38493

michaels said:

Deleted_User said:

michaels said:

Deleted_User said:

michaels said:

Pat38493 said:

michaels said:

I find this tool useful as you can put in all sorts of other cashflows, lump sums etc and it tells you what your SWR (100%, 99%, 95% etc no failures) and annual DC withdrawals for a length of time you choose (I tend to use to age 95) would have been given your chosen asset split over the last 120 odd years.

An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) – Early Retirement Now

I was looking at this sheet this evening.  On the first sheet what is the meaning of the sections called “safe cons amounts conditional on S&P 500 drawdown”, with various columns for different % levels.  Is this relating somehow to the market performance during the start year or suchlike?

I think it is suggesting that if you start your drawdown during a period when the S&P has fallen back from its peak level then historically you would have been able to withdraw slightly more  (logically it sounds reasonable and helps with the situation where if you retire in a year when markets are high your big pot gives a high annual amount at a given SWR whereas if you retire a year later when markets are say down 20% then your safe withdrawal amount based on a percentage alone is also 20% smaller - ie if markets are not as 'high' then they are likely to perform 'better' going forward - of course it contradicts efficient market theory)

The problem is that “peaks” or only ever identifiable after falls. One could be waiting for a 20% drawdown for 10 years. 

Looking at the last 12 months, 12 months ago the S&P was at an all time max so on the table you could only choose the lowest SWR rate.  12 months later it is down 20% so in theory you could be safe with the slightly higher SWR rate.  This higher rate goes some way to make up for the fact that your pot is now 20% (depending on asset mix) smaller than it was 12 months ago so your actual SW currency amount does not reduce by as much as a strict SWR rule would imply.

It is not about waiting for a period of market retenchment so you can risk a higher withdrawal rate but more suggesting that if the market has fallen the SWR is higher but this will not go as far as meaning the swr amount does not decline when markets fall.

Of course this is all about the 'traditional' definition of SWR - the highest (fixed, inflation adjusted) withdrawal rate that would not have resulted in an unacceptable number of failure scenarios based on historic actuals.

End of Dec 2020 S&P500 traded at an all time high around 3800.  Today its trading around 4000, way off highs of about 4800 reached in December 2021.  Based on your approach a 60 year old starting retirement today can safely withdraw a lot more for life than his counterpart 2 years ago. Right? 

As mentioned, it is not my approach but yes based on the historic data record.  Of course we all know that this is very limited in terms of whether it represents enough distinct periods to be statistically useful.

Hold the front page - this spreadsheet from michaels is the first one of these type of tools I've used which actually seems to show better results if I take my DB later, which as we've discussed is the usual recommendation.  

It also though seems to offer a more pessimistic SWL than a couple of others like for example Timeline, which is again contrary to what has been discussed here before - it was posited that US centric tools would give results that are too optimistic but actually I see worse results with US centric models like cfiresim and the above, than with Timeline which is a UK tool (at least for my proposed scenarios that I am putting in).

DT2001

Very interesting thread. I took my DB pension at 51, eleven years ago. Unfortunately I hadn’t come across a discussion such as this and based my decision on a spreadsheet that showed a crossover point in my mid 70’s. I’m sure the spreadsheet assumptions were only partially correct.
On the positive side all bar one year before (NRA) I have had the pension tax free and it has been invested as OH earnt more than forecast. At 65 GMP kicks in and part on the pension gets CPI increases at max of 3% and part no increases (changed when new SP came into force). Inflation in the future will have potentially a big impact. 

In my case the lower amount on an early taken DB plus SP will cover our ‘ basic’ needs income without OH’s SP. We are also expecting to leave an inheritance and so have an eye on IHT thresholds.

The aim for us is to have an amount year on year rather than maximising our SWR so that probably tempers the approach.

I like Lintons approach of topping up the cash pot from natural income as it reduces the safety pot needed and also potentially allows excess income to be passed on (using IHT relief) immediately.

As we are/have been self employed for many years with quite variable income I think it allows a less stressed approach to market volatility. How much wriggle room is there in your expenditure and how much are you willing to reduce it affects your approach. 

michaels

Pat38493 said:

michaels said:

Deleted_User said:

michaels said:

Deleted_User said:

michaels said:

Pat38493 said:

michaels said:

I find this tool useful as you can put in all sorts of other cashflows, lump sums etc and it tells you what your SWR (100%, 99%, 95% etc no failures) and annual DC withdrawals for a length of time you choose (I tend to use to age 95) would have been given your chosen asset split over the last 120 odd years.

An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) – Early Retirement Now

I was looking at this sheet this evening.  On the first sheet what is the meaning of the sections called “safe cons amounts conditional on S&P 500 drawdown”, with various columns for different % levels.  Is this relating somehow to the market performance during the start year or suchlike?

I think it is suggesting that if you start your drawdown during a period when the S&P has fallen back from its peak level then historically you would have been able to withdraw slightly more  (logically it sounds reasonable and helps with the situation where if you retire in a year when markets are high your big pot gives a high annual amount at a given SWR whereas if you retire a year later when markets are say down 20% then your safe withdrawal amount based on a percentage alone is also 20% smaller - ie if markets are not as 'high' then they are likely to perform 'better' going forward - of course it contradicts efficient market theory)

The problem is that “peaks” or only ever identifiable after falls. One could be waiting for a 20% drawdown for 10 years. 

Looking at the last 12 months, 12 months ago the S&P was at an all time max so on the table you could only choose the lowest SWR rate.  12 months later it is down 20% so in theory you could be safe with the slightly higher SWR rate.  This higher rate goes some way to make up for the fact that your pot is now 20% (depending on asset mix) smaller than it was 12 months ago so your actual SW currency amount does not reduce by as much as a strict SWR rule would imply.

It is not about waiting for a period of market retenchment so you can risk a higher withdrawal rate but more suggesting that if the market has fallen the SWR is higher but this will not go as far as meaning the swr amount does not decline when markets fall.

Of course this is all about the 'traditional' definition of SWR - the highest (fixed, inflation adjusted) withdrawal rate that would not have resulted in an unacceptable number of failure scenarios based on historic actuals.

End of Dec 2020 S&P500 traded at an all time high around 3800.  Today its trading around 4000, way off highs of about 4800 reached in December 2021.  Based on your approach a 60 year old starting retirement today can safely withdraw a lot more for life than his counterpart 2 years ago. Right? 

As mentioned, it is not my approach but yes based on the historic data record.  Of course we all know that this is very limited in terms of whether it represents enough distinct periods to be statistically useful.

Hold the front page - this spreadsheet from michaels is the first one of these type of tools I've used which actually seems to show better results if I take my DB later, which as we've discussed is the usual recommendation.  

It also though seems to offer a more pessimistic SWL than a couple of others like for example Timeline, which is again contrary to what has been discussed here before - it was posited that US centric tools would give results that are too optimistic but actually I see worse results with US centric models like cfiresim and the above, than with Timeline which is a UK tool (at least for my proposed scenarios that I am putting in).

It also models periods forward using the assumptions for average returns in future and includes these to end scenarios that have started in the last 30 years in the analysis which means depending how you set these values on the front sheet the current period may well be the 'worse case' one that gives the SWR

Pat38493

michaels said:

Pat38493 said:

michaels said:

Deleted_User said:

michaels said:

Deleted_User said:

michaels said:

Pat38493 said:

michaels said:

I find this tool useful as you can put in all sorts of other cashflows, lump sums etc and it tells you what your SWR (100%, 99%, 95% etc no failures) and annual DC withdrawals for a length of time you choose (I tend to use to age 95) would have been given your chosen asset split over the last 120 odd years.

An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) – Early Retirement Now

I was looking at this sheet this evening.  On the first sheet what is the meaning of the sections called “safe cons amounts conditional on S&P 500 drawdown”, with various columns for different % levels.  Is this relating somehow to the market performance during the start year or suchlike?

I think it is suggesting that if you start your drawdown during a period when the S&P has fallen back from its peak level then historically you would have been able to withdraw slightly more  (logically it sounds reasonable and helps with the situation where if you retire in a year when markets are high your big pot gives a high annual amount at a given SWR whereas if you retire a year later when markets are say down 20% then your safe withdrawal amount based on a percentage alone is also 20% smaller - ie if markets are not as 'high' then they are likely to perform 'better' going forward - of course it contradicts efficient market theory)

The problem is that “peaks” or only ever identifiable after falls. One could be waiting for a 20% drawdown for 10 years. 

Looking at the last 12 months, 12 months ago the S&P was at an all time max so on the table you could only choose the lowest SWR rate.  12 months later it is down 20% so in theory you could be safe with the slightly higher SWR rate.  This higher rate goes some way to make up for the fact that your pot is now 20% (depending on asset mix) smaller than it was 12 months ago so your actual SW currency amount does not reduce by as much as a strict SWR rule would imply.

It is not about waiting for a period of market retenchment so you can risk a higher withdrawal rate but more suggesting that if the market has fallen the SWR is higher but this will not go as far as meaning the swr amount does not decline when markets fall.

Of course this is all about the 'traditional' definition of SWR - the highest (fixed, inflation adjusted) withdrawal rate that would not have resulted in an unacceptable number of failure scenarios based on historic actuals.

End of Dec 2020 S&P500 traded at an all time high around 3800.  Today its trading around 4000, way off highs of about 4800 reached in December 2021.  Based on your approach a 60 year old starting retirement today can safely withdraw a lot more for life than his counterpart 2 years ago. Right? 

As mentioned, it is not my approach but yes based on the historic data record.  Of course we all know that this is very limited in terms of whether it represents enough distinct periods to be statistically useful.

Hold the front page - this spreadsheet from michaels is the first one of these type of tools I've used which actually seems to show better results if I take my DB later, which as we've discussed is the usual recommendation.  

It also though seems to offer a more pessimistic SWL than a couple of others like for example Timeline, which is again contrary to what has been discussed here before - it was posited that US centric tools would give results that are too optimistic but actually I see worse results with US centric models like cfiresim and the above, than with Timeline which is a UK tool (at least for my proposed scenarios that I am putting in).

It also models periods forward using the assumptions for average returns in future and includes these to end scenarios that have started in the last 30 years in the analysis which means depending how you set these values on the front sheet the current period may well be the 'worse case' one that gives the SWR

I have been reading some of the blogs of the guy who created that sheet.

It's a slow burn but he seems to be heading towards saying that you should adjust your withdrawals based on current CAPE of the market.

https://earlyretirementnow.com/2022/10/12/dynamic-withdrawal-rates-based-on-the-shiller-cape-swr-series-part-54/

In this blog which seems to be the most recent one from this year, he states that the CAPE he is using is 27, but the current adjusted CAPE is 21 and would provide even better results.  Do you know what that means?  I cannot find any reference to CAPE values of S&P 500 ever being 21 in October this year.

He makes this statement twice in the blog including in the conclusion so it can't be a typo.  What the heck is "adjusted CAPE"?

Also - if you wanted to apply such a strategy to the UK, would you have to calculate CAPE for the relevant mix of funds that you have?  These blogs seem to take the US S&P 500 as the driver for all this stuff?

coastline

Pat38493 said:

michaels said:

Pat38493 said:

michaels said:

Deleted_User said:

michaels said:

Deleted_User said:

michaels said:

Pat38493 said:

michaels said:

I find this tool useful as you can put in all sorts of other cashflows, lump sums etc and it tells you what your SWR (100%, 99%, 95% etc no failures) and annual DC withdrawals for a length of time you choose (I tend to use to age 95) would have been given your chosen asset split over the last 120 odd years.

An Updated Google Sheet DIY Withdrawal Rate Toolbox (SWR Series Part 28) – Early Retirement Now

I was looking at this sheet this evening.  On the first sheet what is the meaning of the sections called “safe cons amounts conditional on S&P 500 drawdown”, with various columns for different % levels.  Is this relating somehow to the market performance during the start year or suchlike?

I think it is suggesting that if you start your drawdown during a period when the S&P has fallen back from its peak level then historically you would have been able to withdraw slightly more  (logically it sounds reasonable and helps with the situation where if you retire in a year when markets are high your big pot gives a high annual amount at a given SWR whereas if you retire a year later when markets are say down 20% then your safe withdrawal amount based on a percentage alone is also 20% smaller - ie if markets are not as 'high' then they are likely to perform 'better' going forward - of course it contradicts efficient market theory)

The problem is that “peaks” or only ever identifiable after falls. One could be waiting for a 20% drawdown for 10 years. 

Looking at the last 12 months, 12 months ago the S&P was at an all time max so on the table you could only choose the lowest SWR rate.  12 months later it is down 20% so in theory you could be safe with the slightly higher SWR rate.  This higher rate goes some way to make up for the fact that your pot is now 20% (depending on asset mix) smaller than it was 12 months ago so your actual SW currency amount does not reduce by as much as a strict SWR rule would imply.

It is not about waiting for a period of market retenchment so you can risk a higher withdrawal rate but more suggesting that if the market has fallen the SWR is higher but this will not go as far as meaning the swr amount does not decline when markets fall.

Of course this is all about the 'traditional' definition of SWR - the highest (fixed, inflation adjusted) withdrawal rate that would not have resulted in an unacceptable number of failure scenarios based on historic actuals.

End of Dec 2020 S&P500 traded at an all time high around 3800.  Today its trading around 4000, way off highs of about 4800 reached in December 2021.  Based on your approach a 60 year old starting retirement today can safely withdraw a lot more for life than his counterpart 2 years ago. Right? 

As mentioned, it is not my approach but yes based on the historic data record.  Of course we all know that this is very limited in terms of whether it represents enough distinct periods to be statistically useful.

Hold the front page - this spreadsheet from michaels is the first one of these type of tools I've used which actually seems to show better results if I take my DB later, which as we've discussed is the usual recommendation.  

It also though seems to offer a more pessimistic SWL than a couple of others like for example Timeline, which is again contrary to what has been discussed here before - it was posited that US centric tools would give results that are too optimistic but actually I see worse results with US centric models like cfiresim and the above, than with Timeline which is a UK tool (at least for my proposed scenarios that I am putting in).

It also models periods forward using the assumptions for average returns in future and includes these to end scenarios that have started in the last 30 years in the analysis which means depending how you set these values on the front sheet the current period may well be the 'worse case' one that gives the SWR

I have been reading some of the blogs of the guy who created that sheet.

It's a slow burn but he seems to be heading towards saying that you should adjust your withdrawals based on current CAPE of the market.

https://earlyretirementnow.com/2022/10/12/dynamic-withdrawal-rates-based-on-the-shiller-cape-swr-series-part-54/

In this blog which seems to be the most recent one from this year, he states that the CAPE he is using is 27, but the current adjusted CAPE is 21 and would provide even better results.  Do you know what that means?  I cannot find any reference to CAPE values of S&P 500 ever being 21 in October this year.

He makes this statement twice in the blog including in the conclusion so it can't be a typo.  What the heck is "adjusted CAPE"?

Also - if you wanted to apply such a strategy to the UK, would you have to calculate CAPE for the relevant mix of funds that you have?  These blogs seem to take the US S&P 500 as the driver for all this stuff?

All US data really and can only be used as a guide. Very little UK data out there.

S&P 500 PE Ratio - 90 Year Historical Chart | MacroTrends

E-h8XY4VcAkuyOF (900×617) (twimg.com)

From those very high P/E valuations markets have struggled during the next decade. On the other hand there's been good periods where P/E's were lower. 

EZ_91bOXQAAp1Zo (1400×1169) (twimg.com)

EhCv7GqUwAACMF8 (900×504) (twimg.com)

E369O3RXMAMX8OC (724×325) (twimg.com)

Looked at some data months ago highlighting those difficult periods again US data . Basically where the market slumps investments have fallen up to 50% and taken years to recover. During these periods what to do ? Withdraw less , use the cash buffer ?

Pension Funds and De-Risking - Page 5 — MoneySavingExpert Forum

NedS

Pat38493 said:

Also - if you wanted to apply such a strategy to the UK, would you have to calculate CAPE for the relevant mix of funds that you have?  These blogs seem to take the US S&P 500 as the driver for all this stuff?

When you say apply such a strategy to the UK, do you mean apply it to UK markets (FTSE All Share) or UK investors, who presumably hold a similar mix of investments to their American peers. I assume you mean the latter.

As a UK investor, if you are invested globally in a diversified portfolio, and you accept the premise that the US stock market drives global markets, and that the S&P500 (as the best proxy for US markets) represents 55-60% of your globally diversified portfolio, then using the S&P500 is not a bad representation of the risky portion of your portfolio, although you could argue that a global equity tracker (MSCI or FTSE) may be better, but may be less well researched in terms of ready availability of CAPE and other data needed to plug into your models. Put simply, the S&P500 is probably the most researched equity index available and although it may only represent around a half of your equity portfolio, it pretty much drives what happens in the other half too.