More Gummy Slices Addendum

Here is the regression equation for the stock-only portfolio HSWR100C. The 30-year Historical Surviving Withdrawal Rate y varies with x, the Percentage Earnings Yield 100E10/P:

y = 1.3426x-0.2089 plus and minus 2.0%.
R-squared is 0.7642.

I set the expenses at 0.20%. I used the CPI for inflation adjustments. I adjusted withdrawals to match inflation. The withdrawal rate is a percentage of the portfolio's initial balance.

The 30-year Historical Surviving Withdrawal Rate is the maximum rate that would have had a positive balance at year 30. The balance at year 30 would have been zero or negative if the withdrawal rate were increased by 0.1%.

The worst case 30-year Historical Surviving Withdrawal Rate was 3.5% for the sequence beginning in 1929.

I have posted withdrawal rates and a graph in my Yahoo Briefcase. It is in the HSWR50CT GT VT VTn folder.

Yahoo Briefcase

Have fun.

John Walter Russell
November 29, 2005