Historically, over any 30 year span, has there been an 80% drop in market value, or a huge drop that was not preceded by a bull market? What exact sequence would have to occur for this hypothetical to have lost 80% in market value and be stuck in a market that doesn't recover quickly?
By most historical averages, after 20 years the hypothetical portfolio has grown to $2 million inflation-adjusted, which means a drop to $100k or $250k would be a whopping 87.5%+ crash.
On the flip side, a prolonged bear market in the first few years are the worst case scenario, though for most early retirees, the choices are to ignore the "fixed 5%" and/or seek additional income, if the sequence of returns really are dire enough.
By most historical averages, after 20 years the hypothetical portfolio has grown to $2 million inflation-adjusted, which means a drop to $100k or $250k would be a whopping 87.5%+ crash.
On the flip side, a prolonged bear market in the first few years are the worst case scenario, though for most early retirees, the choices are to ignore the "fixed 5%" and/or seek additional income, if the sequence of returns really are dire enough.