Some PWR acknowledgements and comments

I posted recently on trend following and withdrawal rates.  I was responding mostly to an article by Clare et al. "Can Sustainable Withdrawal Rates Be Enhanced by Trend Following?" where I used some math from that article as well as from earlyretirementnow.com.  I think this is an interesting and under-mined area of the current ret-fin world and I wanted to acknowledge them again as well as point to several other sources for this type of analysis. So far, what I've read, run into, or seen referenced when it comes to PWR (perfect withdrawal rates) in its various forms are as follows though there may be quite a few others:

• Can Sustainable Withdrawal Rates Be Enhanced by Trend Following? [2017] Clare...
• Safe Withdrawal Rates – Part 8:Technical Appendix[2017],  EarlyRetirementNow.com
• The Perfect Withdrawal Amount: A Methodology for Creating Retirement Account Distribution Strategies [2015] Suarez...
• Optimal withdrawal strategy for retirement income portfolios. The Retirement Management Journal (Morningstar) [2012] Blanchett, D. M., Kowara, M., & Chen, P.
• Maximum Withdrawal Rates:An Empirical and Global Perspective, Estrada 2017

Some comments:

I find the PWR approach to be a useful addition to retirement analysis that augments other risk analysis.  I do not find it to be mammothly different from Monte Carlo simulation since it trades one type of future hypothecated (second definition) outcome distribution (end wealth and related fail rates) for another (distribution of expected path-dependent perfect withdrawal rates) but it looks like it might be more analytically tractable and transparent in many ways that add value.  I had some comments in particular about Suarez et. al (2015) after a fast skim.  I want to go back and digest what they are saying but some initial thoughts were:

1. It's a pretty good review of the literature on this topic and its precursors

2. It is a paean to adaptation in general.  It (the article) also specifically positions PWR as not an "answer" but a tool within a continuously adaptive process, a changing analysis that provides early warning and a sense of scale about how much change will be required. They lay out the technique which I have not yet read closely.  I hadn't thought of PWR that way (yet) but it makes perfect sense.  This is useful stuff.

3. I'll probably have to up my game on stats if not calculus to get the most out of the PWR game.  For me it has been just an amateur-hack game so far. Since I am not an academic or practitioner, I'll have to decide how far to take it.  

4. Suarez makes the case for adding stochastic longevity to the PWR analysis.  This is interesting because I have done that before and I am equipped, programming wise, to do it.  The question is whether I have the energy and whether the payoffs are high enough to do it right now.  Also, to do it the way I think it might work best seems like it might be a little computationally intense but we'll see.

5. What I like about Suarez and the content in the other links is that they take sequence risk -- which to me in most analyses I've read is present but implicit and hidden or opaque -- and makes it very explicit and analytical and visible in the underlying math.  That right there is worth the cost of entry.

6. Some things that are missing in the current analysis, as is mostly mentioned in the article,  are things like taxes and fees, stochastic longevity or at least a bigger nod to superannuation risk (the article does get into this a bit), possible low-return regimes, alternative return distributions etc.  I tried to tackle an overly simplified amateur version of these issues in a prior post but I think all of this would be a rich area for future analysis within a PWR context.