Long Retirements and the Scenario Surfer

You can use the Scenario Surfer to prepare for long retirements. Simply take advantage of Current Research N: Turning Points.

Current Research N shows that you should start at a turning point and apply it until you spot another. In today’s market, you would start with P/E10=26 and start with a balance of only $1. You would withdraw $0 each year until P/E10 fell close 14. Then you would deposit (make a negative withdrawal) of your account balance and start withdrawing your regular amount. The error caused by the initial $1 deposit would be minimal.

You would continue for 20 years (when starting from P/E10=26). Then you would back up and record the balance at the turning point (lowest P/E10 value). You would record the balance and count the number of years of active investing.

At that point, you would change to a P/E10=8 Normal Market. You would enter the recorded balance and continue for a full thirty years. At that point, you would spot the value of the highest P/E10. That is your next turning point. Once again, record the balance at the turning point and count the number of years of active investing.

Continue, alternating between a P/E10=26 Bear Market and a P/E10=8 Normal Market. You can extend your practice to any number of years.

Have fun.

John Walter Russell
February 13, 2009