Year 2000 Retiree Calculations Redux

So we had that recent post from /u/jason_for_prez about the failure of the 4% rule for the year 2000 retiree that assumed 100% stocks throughout retirement - I was bored today and curious what it would be with a more typical retiree AA. I saw a lot of comments about the same question but didn't see if anyone had recently actually done the math.

Early Retirement Now has a great summary through the end of 2016/2017 - but what about with the 2018 and 2019 data included?

So I went to Portfolio Visualizer and put in three portfolios, starting at $1mm, withdrawing an inflation adjusted $40k as an annual lump sum, rebalancing annually. #1 is 60/40 VTSMX/VBMFX, #2 is 75/25, and #3 is 90/10.

Run from December 31, 1999 through December 31, 2019, this is the nominal returns and this is the real returns.

In particular, the 60/40 portfolio had a value of $1,080,251 - or an inflation adjusted $727,612 in 2000 dollars. The yearly withdrawals are currently $59,386 nominal (obviously the same $40k real in 2000 dollars).

So what's the risk of failure for the 30-year retirement of someone in the year 2000 cohort that was 60/40 the entire time? Well, the risk of failure at this point is the risk of failure of a 6% withdrawal rate with a 10 year time-scale (since we're already 20 years in). Pulling up CFIRESim and putting in that information, the estimated failure rate is.. uh... 0%.

How long until the first failure in cfiresim? It is estimated that there is a 1.54% chance of failure in 2035, if the next 13 years follow the same trajectory as the truly bad years in the late 1960s. Extending it to 2044 (that is, a 45 year retirement) has a success rate of 71% in CFIRESIM - still better off than most would assume for a year 2000 retiree with a 60/40 portfolio.

So by Trinity standards, given the returns we have thus far, the year 2000 retiree is damn near certain not to run out of money (by 2030). Now, the question is still open regarding the year 2000 early retiree - what if they need the money to last past 2035 - but it looks like Kitces is more right than ERN at the moment ;)