As before, I hope I didn't botch the code but that is standard sandbagging for me. This is the real absolute spend scaled to an initial 1M portfolio (.04/.12) at year 50. 50 could represent a very very long retirement or a long dated trust or an endowment. The past posts using a weighted utility calc miss some of this because it is survival weighted and at 50 years the conditional survival prob is approaching zero (.0000001101895 using recent params). So basically at 50 most retirees wouldn't care though when I retired at 50, 50 years was at least within the realm of possibility.
If I got this right then a high percent spend undermines future spend by way of depletion. Duh. and low spend preserves a portfolio so potentially a low spend % can get quite high. Duh again. But the right side of wealth and spend distributions is boring in personal finance. Of course it can get pretty high. It's always the left side one has to watch. I haven't looked at the left side here because all the distributions in the figure are moving left.
So, constant spend doesn't have that left-creeping or wide-distribution problem. But what it has, if you know this stuff, is a "spending cliff" when the money runs out. Same thing, sorta, just transformed into a more abrupt and permanent diminution of lifestyle at one future time. As C Hoffstein says "you can't destroy risk, just transform it." If I quote him right. There was no real purpose here. Just wanted to see it.
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