Re:Investing for Geeks
by alejohausner on Saturday September 17, 2016 @11:19AM
(#12520828)
I'll revise my position, but only slightly. Using the data that you pointed me at, if you had retired in 1929, you would have had to wait until 1944 before the market broke through permanently above the 1929 level, with dividends reinvested. So you would only have starved for 15 years, not 25.
Just because the market's down doesn't mean you can't spend retirement savings. You wouldn't need to starve (as someone wealthy enough to retire in 1929). Ideally you scale back your spending and look for work.
Social security was signed into law in 1935 (6 years later).
The problem isn't lasting the first 6-15 years (4% rule of thumb = 25x yearly spending; in very low risk cash/bonds obviously that lasts around 25 years), it's having any money left over to last the rest.
And keep in mind, 1929 and ~1965 are the two worst years to retire in in US history.
http://awealthofcommonsense.com/2014/02/worlds-worst-market-...
> What if you had retired in 1929? You would have received nary a return for 25 years.
That just isn't true? You're looking at charts without dividends reinvested. Plug 1929-1950 into https://www.measuringworth.com/datasets/sap/ for example. It had bounced back above 1929 by 1937; never falls below the starting value after 1944.