Examine 4% rule by historical data

Parameters

1. max withdraw rate (-max)

• e.g., -max 0.04

2. min withdraw rate (-min)

• e.g., -min 0.03

3. years to live (-y)

• e.g., -y 30

4. tax rate of dividend (-t)

• e.g., -t 0.3

Flow

1. Set initial saving to

personal consumption expenditures per capita / max withdraw rate.

2. For the frist time, withdraw

saving * max withdraw rate.

3. Compute next year's saving by stock price and dividend.

4. Compute target saving by inflation.

5. If saving is more than target saving, withdraw saving * max withdraw rate, otherwise, withdraw saving * min withdraw rate.

6. Repeat 3.-5. until years to live pass or there is no saving left.

Output

1. successful days and failed days, also the successful rate.

2. max withdraw count and min withdraw count, also the ratio.

Example Usage

go run main.go -max 0.03 -min 0.02 -y 30 -t 0.4

DATA source:

personal-consumption-expenditures-per-capita

https://fred.stlouisfed.org/series/A794RC0Q052SBEA

US Inflation rate

https://www.usinflationcalculator.com/inflation/historical-inflation-rates/

spx

https://stooq.com/q/d/?s=%5Espx&c=0

S&P 500 Dividend Yield by Year

https://www.multpl.com/s-p-500-dividend-yield/table/by-year