cFiresim and other simulators in the UK ??

QrizB

OldScientist said:

2) The future will not be the same as the past.  What the above graph tells us, is that for a 60/40 portfolio, the SAFEMAX for a UK retiree was around 3.0 to 3.5% depending on what was held - since we have no idea what future values might be, and variations with time are very large, fine tuning it to a better precision than that is probably futile.

The corrollary of this is that 2024 might be a 3% SWR year like 1912, or it might be a 12% SWR year like 1982. But we won't know until 2054, which is a bit late for anyone trying to make a decision today.

OldScientist

QrizB said:

OldScientist said:

2) The future will not be the same as the past.  What the above graph tells us, is that for a 60/40 portfolio, the SAFEMAX for a UK retiree was around 3.0 to 3.5% depending on what was held - since we have no idea what future values might be, and variations with time are very large, fine tuning it to a better precision than that is probably futile.

The corrollary of this is that 2024 might be a 3% SWR year like 1912, or it might be a 12% SWR year like 1982. But we won't know until 2054, which is a bit late for anyone trying to make a decision today.

I agree - it might also be a 2.5% SWR year - who knows? This is why, IMO, a flexible withdrawal approach (and there are loads of those) is more robust than a non-adaptive approach like constant inflation adjusted withdrawals in that the initial selection of withdrawal rate becomes less critical.

To stay vaguely on topic, this is another weakness of the calculator at https://www.2020financial.co.uk/pension-drawdown-calculator/ - it only models inflation adjusted withdrawals. However, to my knowledge, it remains the only free simulator using historical data for a UK-based retirement (e.g., the calculator at https://www.fidelity.co.uk/retirement/calculators/pension-drawdown-tool/# mentioned above appears to use a Monte Carlo approach with nominal returns for a fixed portfolio, 25/75/5 - equities/bonds/cash, and then assumes an inflation rate of 2%, the outcomes for the 'poor' market conditions appear to be somewhat overoptimistic compared to historical ones).