What IS a SAFE WITHDRAWAL RATE?

In this video, we dive deep into the heated debate sparked by my recent Dave Ramsey video, where I discussed retirement withdrawal rates. What began as a simple conversation about easing retirees' anxiety over withdrawal rates quickly turned into a firestorm of differing opinions. The comments were packed with passionate views on what truly constitutes a "safe" withdrawal rate, and today, we’re going to dig even deeper. Using Monte Carlo simulations and other financial tools, I’ll break down the risks and realities of various withdrawal strategies. Get ready for an eye-opening analysis!

First, let’s revisit the goal of my original Dave Ramsey video. I wanted to help retirees feel secure in spending their hard-earned savings without fear of running out of money. But in doing so, I unintentionally opened up a big debate on what is considered a safe withdrawal rate. Opinions were divided, and in this follow-up, I aim to clarify the complexities by examining conservative and aggressive withdrawal approaches. To give you a more detailed perspective, I’ll demonstrate the impact of sequence of returns risk using a free online Monte Carlo simulator.

We’ll also test popular financial claims, like Dave Ramsey's suggestion of an 8% withdrawal rate. By simulating various scenarios, we’ll see how sustainable different withdrawal rates really are over the long term. I’ll run these simulations with portfolios of $1 million, examining both 30-year and 75-year timeframes to provide insights into what’s realistically possible. Spoiler alert: The results might surprise you, especially when we factor in the risk of poor market conditions early in retirement.

Ultimately, we’ll discuss why no withdrawal rate can ever be deemed entirely "safe" due to the unpredictable nature of the markets. Instead of seeking a perfect rate, we need to focus on the probabilities of success. By the end of this video, you’ll have a clearer understanding of how to plan your retirement withdrawals with more confidence and knowledge. Be sure to check out the links in the description for the tools I used, and don’t forget to leave your thoughts in the comments below!


If you would like a personal one-on-one consultation, please contact me here:
https://joemacek.com/contact-us/

Links to Website Calculators
https://joemacek.com/resources/
https://financialcalculators.net/iapr...

Studies Showing Advisor Value!
https://advisors.vanguard.com/content...
https://www.pm-research.com/content/i...

Link of Sources:
   • Elon Musk's SECRET to Being "Less Wrong" 🤫🤫  
https://www.portfoliovisualizer.com/m...

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