In "A forward walk through the 70s using two types of dynamic asset allocation" I was playing around with some spend rates and asset allocations in the context of retiring through the 1970s to understand some risk viewed through the lens of the economic utility of consumption during a difficult decade. I used a constant spend and dynamic (glide up) allocation to test some ideas. One scenario was also fully dynamic. The write-up is in the link.
What I didn't do at any point was test feasibility either at the beginning or along the way. Feasibility is the test, at some point, of whether A > B or A/B > 1, where A is the present value of net monetizable wealth, and B is the present value of the spending liability. When I applied the test to the scenarios in the link above, it dawned on me that none of scenarios were feasible to begin with.
If we define the present value of spending reductively to be nothing more than a (conditional) survival probability weighted sum of the real (1964 dollars in this case) cash flow, then the feasibility condition is not met until initial spending is reduced to 30,000 in constant spend terms. At that point the CE spend was, predictably, 30k and terminal wealth in real ('64) terms was 962,804. This outcome, if it had been part of the previous illustration, would have lost the utility war except against the 3.9 and 4% spends, won the bequest war, and won the hearts of feasibility aficionados around the world. The cost, however, would have been a pretty large hit to early lifestyle relative to a desideratum of 40k, but would be a rational, implementable choice if one does not happen to live life in relative terms.
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