"The referenced article is indeed excellent. That's why I posted it."
Nothing like modesty MJG. (And a reason some of us take umbrage with some of your posts).
MikeM termed the NYT article "very good". I termed it "good" - adding a reservation regarding source. I don't have time to enjoy the additional sources you've linked. I'm sure others will.
My contribution was mainly to show how each of us has a unique circumstance and unique needs in retirement planning. I shared more than I generally do in the hopes it might help others address their own varied needs. My purpose wasn't to support or condemn Monte Carlo. In fact, in my own case, I've run no simulations (other than in the back of my head from time to time). Period.
I'll defer to @msf on the overall merit and accuracy of the calculations presented by you and/or your sources. I've found his math skills over the years both considerable and commendable. By contrast, I barely survived high school Algebra with a C, and have assiduously avoided all math classes since.
Regards

Thanks @ Mike & Ol Skeet for getting this back on track. Agree it's a good article. I view most anything financial in the NYT times with a healthy dose of skeptism. They're great at a lot of things - but financial analysis and reporting isn't their forte. To the crux of the issue: I think where you run into problems is (1) trying to formulate a simple one size fits all approach to retirement drawdowns and/or (2) assuming the next 25 years will be like the last 25 years (interest rates, inflation, equity valuations, etc.).
I can't relate to the central question of how to survive "X" number of years on "X" number of dollars invested. Reason: I enjoy both a defined benefit pension with a partial COL rider and also a decent SS income stream. And, supplementary health insurance through retirement plan as well. Conceivably, these would provide for basic living expenses - though it would be a very "spartan" lifestyle without travel or other things that make retirement enjoyable.
In my highly atypical instance, even after taking distributions, retirement savings have roughly doubled over the nearly 20 years since retirement (albeit in nominal dollar terms only). At the same time, more than half of that has now been placed under the Roth umbrella, whereas at the time of retirement none was. Much of the reason for the increase is that the money was left largely undisturbed during the first 10 years.
As far as the article's mention that withdrawals are not linear or equal every year - I couldn't agree more. There have been years when I needed to take a larger sum - say as a sizable down payment on a new car or for unexpected home repairs - and other years when I've needed very little.
I don't envy those without a pension or other solid income stream in retirement. Not everyone would be satisfied with a somewhat spartan lifestyle either. As I look at the markets over the past 10-20 years, I'd not be eager risking a large retirement nest egg with an aggressive approach in retirement. Lots of warning signs IMHO. But, no one really knows. As I said at the start, the problem with these mathematical models is that the next 25 years could be markedly different than the last 25 - as others, notably msf, have tried to explain.

FWIW, getting back to the article, I thought it was very good. Basically, there are a whole lot of systems out there other than the strict, yet simple 4% rule. Some strategies give greater assurances then others for your money lasting through-out your retirement years. But no matter which you choose, there will always be risk of dying with only government assistance or being too frugal as to not enjoy retirement to it's fullest.
@CecilJK , thank you for contributing your system. I'd like to hear from others on their approach. Obviously there is no one way to do it. The ability or planned 'cushion' that would allow one to be flexible appears to be key.
As for Monte Carlo, I don't know a better, easier method that suggests if you are on tract with your savings versus retirement spending expectations. Is there one? There are no guarantees, but Monte Carlo at least supplies guidelines and gives at the very least, a ball park view.

No, Education IRA, those with $2k max limit. Fortunately, I started the accounts for both kids around 2009 (the lowest point of market) and contributed for 3 years, and that 6 thousand has become approximately $12k in both accounts.
Contribution to them is after-tax money, so as you mentioned, they are somewhat like Roth IRAs.

Hi @mrc70
You noted: " my daughter's Education IRA"
Do you mean a 529 "education" account or does your daughter have a Roth IRA that will be used for education?
Thank you.
Catch

"My goal was not to tout Mr. Bengen, but much more importantly, to encourage you Guys to try a powerful Monte Carlo simulation for planning purposes."
To that end, you cited one of the most well known papers on retirement planning as evidence of how well Monte Carlo works, even though it didn't use Monte Carlo. I pointed out that Bengen found zero real world return patterns where a 4% drawdown would fail (over 30 years); your response was to disparage the original work you cited approvingly.
It's enough to make one wonder whether you read the paper.
Instead of comparing and contrasting methodologies, you continue to effuse about Monte Carlo. Bergen took a different approach using using actual returns, that virtually everyone here can understand and use to draw their own conclusions.
In contrast, Monte Carlo spews out magic numbers (not unlike M* star ratings) that leave one to one's own devices to interpret. As guidance you proffer that you consider a 5% risk acceptable, but you didn't give any reasoning, rendering this fact useless. (I wonder why you used these 30 year projections at all; as I recall you've indicated an age which suggests that a 30 year horizon is, shall we say, rather optimistic.)
Even the probabilities posted are meaningless because unlike Bengen, you didn't state the assumptions you used, such as the input values for mean and standard deviations of stocks, bonds, and inflation. Nor did you even apply the same asset allocation that Bengen used.
Did you consider skew and kurtosis (the S&P 500 exhibits both)? Do you think that most people using these "push a button" tools even understand that question? (No disrespect of MFO readers is intended; many have stated that statistics is not their forte.)
The fact that a program can do thousands of computations in seconds is not so much a demonstration of the usefulness of a program as much as it is a testament to the operation of GIGO. A scalpel is a great tool in the right hands; in other hands it can be destructive.
When all one has is a hammer, everything looks like a nail.

For me ARTKX has been a core international fund for last several years. I tempted to split it across ARTKX and FMIJX in the 1-2 years, but controlled that urge. I bought VWIGX in my daughter's Education IRA a few years ago and it made good money in that account, and I added Vanguard International Dividend Growth index in my retirement account a few months ago.
SFGIX, ARTWX and GPEOX have been my EM funds. Though, sometimes I tempt to sell one of them and instead play with EM regions (Latin America, Asia and Emerging Euro) with TRow Price funds for a small part of my portfolio.

Why should the earnings yield on stocks be anywhere remotely close to interest rates on bonds when bond rates are contractually guaranteed by law for years in advance while stock earnings can fluctuate wildly from quarter to quarter? Should not the earnings yield on stocks be significantly higher than bond rates to justify the additional risk of owning stocks--the so-called equity risk premium? Moreover, there is no certainty that solid stock earnings now will ever be paid out to shareholders in the form of dividends or reinvested wisely to facilitate future growth. The Berkshire Hathaway example of it not paying dividends in the story is the exception that proves the rule. Few CEOs reinvest in their businesses as wisely as Warren Buffett has.

FYI: The chart below shows several issues investors struggle with all the time. It’s difficult to pick the best performing investment year after year, yet for many investors, it’s an annual event. They look for an encore, picking the best asset class last year with the hope of a repeat performance. Yet, betting on last year’s winner rarely works out.
Assets at the top of the chart one year could be at the bottom the next, and vice versa. Much of this is due to reversion to the mean. But over the long-term, those big swings even out. The chart shows annual returns for eight asset classes against a diversified portfolio. Diversification works to smooth out those big swings in the short-term. While you’ll never get the biggest gains of any year, you avoid the huge losses.
The table below ranks the best to worst investment returns by asset class over the past 15 years. Hover over the table to highlight the asset class returns.
Regards,
Ted
https://novelinvestor.com/asset-class-returns/

Not sure why 3-month returns are of any consequence. Any fund can have a terrific quarter, but that is no reason to own it. ARTIX had a good quarter as noted, but it has struggled terribly the last 3 years. My concern is that the large number of trend followers will start piling in international funds at the wrong moment. Core holds for us are ICEIX, MAPIX, ODVYX, SIGIX, VEA, and BISMX depending on the risk level of the portfolio. We could not be happier that we first bought ICEIX (IVVYX) many years ago. It has been a star, flying under the radar, which is fine for us.

Yes I have been reading up on this fund over the past couple of weeks too and am intrigued by it. I have followed Jain over the past couple of years. I'm curious what % of your equity portfolios does EM currently represent. I'm around 5 %

I'm 10% foreign. And SFGIX is my only dedicated EM equity fund. It's 3% of total portfolio. I've not been adding much at all. Mostly just watching, lately. Rich valuations. I'm re-investing all pay-outs.

Yes I have been reading up on this fund over the past couple of weeks too and am intrigued by it. I have followed Jain over the past couple of years. I'm curious what % of your equity portfolios does EM currently represent. I'm around 5 %

This is a little off-topic of emulation, but if anyone would comment I would appreciate your thoughts and views.
I am a fairly recent (2017) investor in DSEEX so I have not reaped the previous years benefits. I have no intention to liquidate or reduce my percentage invested but I am curious if anyone has thoughts on the recent meaningful "under-performance" of this fund to its benchmark, the S&P 500?
The sectors it is/was invested in (according to its website) have done relatively well, excluding tech recently! So why the recent 2+ % under-performance?
I am just trying to get a better understanding of DSEEX and what to expect under various scenarios, if that's possible!
Thx,
Matt

" A fellow named Bill Bengen initially used that [Monte Carlo] calculation discipline when he concluded that a 4% annual drawdown rate resulted in high portfolio survival odds for an extended retirement period."
Not exactly. He concluded that a 4% drawdown rate resulted in certain survival, not merely a high probability of survival: "no client enjoys less than about 35 years before his retirement money is used up." Survival is typically taken in financial publications to mean lasting 30 years.
More importantly, for the most part he used actual not statistical data. He looked at rolling 50 year periods, starting with 1926 (i.e. 1926-1976) and ending with the 50 year period 1976-2016. Monte Carlo had nothing to do with this.
You may well ask: what "actual" data did he use for years that were in his future (his paper was published in 1994)? Well here he did use statistical data. But of the simplest kind, again no Monte Carlo simulation. He merely "extrapolated the missing years at the average return rates of 10.3 percent for stocks, 5.2 percent for bonds, and 3.0 percent for inflation - a concession to the 'averaging' approach, but one that was unavoidable."
Bengen used actual returns over multiyear spans (i.e. he did not assume that year-to-year returns were random and independent). He filled in missing data by using constant annual returns (i.e. no variation of returns). Everything Monte Carlo is not.
Quotes are from Bengen's original paper, cited in the NYTimes article linked to by MJG. See Figure 1(b) in that paper for how many years a 4% drawdown rate would last if started in any year from 1926 to 1976.

I have found what has worked well for me and my family over the past years was to take a sum equal to no more than one half of the five year average return of the portfolios. For me, this currently computes to a little more than 4.75%. In this way principal grows over time. This is how I ran my parents money in their retirment years and now run mine. And, this is how I am schooling my son to continue to run things when he takes over the management of mine and my wife's assets. If the full factor (currently 4.75%) is not needed it can simply be invested or accrued for times a greater sum might be needed.
Think about it ... Because, for those that have reached critical mass, it works. The secret is to control spending by living within ones means. For those living in retirement that have not reached critical mass times ahead could indeed become most difficult.

Hi guys!
I will say only this: in our retirement package, you had to be 55 with 10 years of employment. Also, it was not offered to office people. Also, not to engineering personnel. At our plant (we have 20 worldwide), this is the second time in 10 years they have done this with us. Other plants have had packages also, so it must be something they can do at their discretion to pare down production as necessary. 'Cause we're non-union? Who knows?
God bless
the Pudd

Yes you have a point Sven. I'm guessing it should have been offered to employees with 20 years or more of service. That would take away age discrimination.
Happy 4/th,
Derf

I really like my equally weighted S&P 500 Index fund (VADAX) as it is cost effective for me to buy through Invesco's nav exchange and purchase program. When I choose to load equity ballast within my portfolio this is the fund I most often use. It is probally not for everyone but it has worked well for me through the years. Currently, it makes up about 5% of my large/mid-cap sleeve found in the growth area of my portfolio. Should we get a nearterm pullback in the market I will most likely become a buyer of this fund as all of the other eleven funds held in the growth area currently are at full allocation accounting for about thirty percent of my portfolio's equity allocation.
From a style orientation it consist of a mix of about half large caps and half mid caps stocks and at times a slight representation to small cap stocks. Year-to-date it trails the cap weighted S&P 500 Index; but, over longer periods of time has out performed it. Plus, it rebalances every quarter something the Index itself does not do being cap weighted.

Fidelity targeted about 7 percent of its workforce, all of them employees who were age 55 or older and had been with the company for at least 10 years.

Isn't that constitute age discrimination?

@Shostakovich why have you held on? I'm asking as someone who's still in FAAFX -- I sold my (larger) FAIRX holding about two years ago. FAAFX is about 7% of my portfolio and I figure (very tentatively) that I might as well hold on at this point. I agree with the above, but he still seems like a guy with the capacity to be brilliant. Can he learn from his mistakes, is the question?

I have no idea if the firm will be proven right or wrong but it would obviously be more useful to know what to invest in rather than being told what won't work. I personally don't anticipate ever investing in a cd paying less than 2% but might invest in a lower paying investment with excellent liquidity.One possible approach for the next 10 years invest in a relatively high paying safe investment such as a 5 year cd with a low penalty for early closeout i.e with decent liquidity and close it out when the market drops 25% which is something that will probably occur at least once in the net 10 years.Yes, i recognise that this strategy might not work but would be pleased with other suggestions