Thanks!jennypenny wrote:I like the new section explaining the asset classes.
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I probably just need more coffee, but I can't figure out why the sustainable WR for this chart is so much lower for a 10yr duration. What am I missing?
The Sustainable WR is the one that maintained the initial inflation-adjusted principal at the end of the single worst stated timeframe. If you plug the same AA into the Funnel chart, you can see how SustWRs kinda-sorta track the red line (it's more complicated than that, but you get the idea).
Looking behind the calculation curtain, the single worst 10-year SustWR period for that portfolio started in 1972. It was just a rough period for that combination of assets (many combinations, actually -- lots of SustWRs are negative over that short of a timeframe).
Give them a few more years to average out, and results pick up quickly. But FWIW I do like to use that 10-year SustWR as a decent measure of whether someone will actually stick with the plan long enough for that to happen. Most people can't handle losing money for a decade without changing course and starting over with something new.