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I got 82.4% regardless of whether I started with a portfolio value of $1M or $3M. Something is wrong with the calculations/simulations. If I can't trust the Q
by jawns 1mo ago
I got 82.4% regardless of whether I started with a portfolio value of $1M or $3M.
Something is wrong with the calculations/simulations.
If I can't trust the Quick Check, why would I trust anything else on the site?
- Eric714 1mo agoSame here
- Eric714 1mo agoThat's because the withdrawals are 4%. If you have $3M, maybe lower the withdrawals to 1.25%. That would be the same as 4% of $1M.
- jawns 1mo agoI don't think that's accurate. If I withdraw 4% of a $1M portfolio, I only have $960K left to compound. If I withdraw 4% of a $3M portfolio, I should have $2.88M left to compound. If the question is "Will your money last?" I would not expect the simulation results to be identical. Edit: I failed here. Downvotes are right. I simulated it myself and saw the results. Leaving this comment here so others can learn from my mistake.
- nhootan 1mo agoThat result is right. The Quick Check takes a withdrawal rate, not a dollar amount, and runs with taxes off, so it's scale invariant: $1M at 4% and $3M at 4% are the same simulation times three. That's what lets it be instant and anonymous, since the whole answer space fits in a small grid I ship to your browser. It stops being true once taxes are on, which is what the full builder does. The page should say so. I'll add a line.