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Comment by elil17 | Hacker News Reader

FYI 4% rule is probably too aggressive because it’s based on historical U.S. stock market data for a 30 year retirement. People are living longer and it’s a better assumption to use global stock market returns (because there’s no reason to think U.S. stocks will continue to outperform the global average - they very well may revert to the mean).

3% is a better bet for people retiring today.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4227132

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Cant you just guarantee your ability to do the 4% rule by buying some 30 year treasuries (the current interest rate is ~4%)? If you're worried that interest rates will be lower if that matures and you're still alive, you could even look at annuities (not that an annuity is necessarily the right move)

Not exactly because the 4% rule allows you to increase your withdrawals throughout time to track inflation. That would it be true if the treasuries.

Also worth noting that the 4% rule is not designed for principle preservation. So you end up with zero after 30 years.

I’m contrast, your approach would preserve the principle.

The 4% rule is inflation-adjusted, so no.

You can do it with TIPS:

https://www.advisorperspectives.com/articles/2022/10/24/the-...

Some people are living longer. But the average is decreasing in the US.

The average just got whalloped by a deadly pandemic, so the average today is probably not representative of how long a person should expect to live in the future.

The average was decreasing before the pandemic.

For men, at least

Isn’t this due to things like the opioid crisis etc? Is it still true if you marginalize on HN readers? There might be a few fentanyl addicts here but I suspect fewer?

You can find comments pretty regularly made here by users and former addicts.

There is little reason to suspect that HN would not follow age and income demographics; and chair sitting is a common source of chronic pain.

But also increasing rates of depression, obesity, diabetes, and other chronic diseases led to the decrease in life expectancy.

Either way, it’s not relevant for withdrawal guidelines because the relevant statistic is life expectancy at retirement age, not life expectancy at birth.

Things like ODs mostly impact those who aren’t yet of retirement age, so they don’t effect the parts of the actuarial tables used for retirement calculations.

The 4% rule paper was written in 1994, when most retirees would expect to live 15.3 (male) to 19.4 (female) more years. People retiring now can expect to live 18.1 to 20.7 years, make and female respectively.

The % rules are calculated using joint actuarial tables and a given percentage chance of going broke before death (I believe it is 5%).

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