Two Sides of FI Secure Your Retirement with this Variable Withdrawal Strategy
Apr 23, 2023
Karsten Jeske, creator of an innovative tool for modeling withdrawal strategies, dives into the mechanics of a variable withdrawal strategy. He illustrates how to utilize the SWR toolbox with the CAPE ratio to tailor a plan that adapts to market conditions. This approach effectively manages sequence risk and ensures flexibility in retirement planning, empowering listeners to design a personalized path to financial security.
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Using the SWR Toolbox
- Download the SWR Toolbox and follow the instructions in Part 1.
- Update the tool's fields with your portfolio and retirement details.
CAPE Ratio Explained
- The SWR Toolbox uses the CAPE ratio, a metric to evaluate market valuation.
- Choose between traditional Schiller CAPE or Karsten's adjusted CAPE, which accounts for modern economic factors.
Modeling Cash Flows
- Model cash inflows and outflows by year in the 'Cash Flow Assist' tab.
- Include income from pensions, social security, and expense changes.