Suggestions

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Filter historical chance of success simulations by starting conditions

The EarlyRetirementNow blog has posted a lot of content and simulations around the idea that the CAPE (or some other metric of current stock market under/over-valuation) at the time of retirement heavily affects your chance of success. See: https://earlyretirementnow.com/2022/10/12/dynamic-withdrawal-rates-based-on-the-shiller-cape-swr-series-part-54/

(The above is just one article where he touches upon it, but it seems to be a recurring theme in his Safe Withdrawal Rate series of posts)

It would be cool to have ProjectionLab allow you to set “starting conditions” for the Chance of Success simulations.

For example, set it so that it only simulations historical runs that started where CAPE > 20 and the market was within 5% of it’s most recent all-time high.

ERN actually implements this as part of the results page of his projection tool: SafeRetirementSpending.com

But it would be nicer to have it in PL

4 votes

Tagged as Suggestion

Suggested 16 August 2025 by user Taako Magnusen

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  • 16 August 2025 Taako Magnusen suggested this task

  • 20 August 2025 Shawn @PL approved this task

  • avatar
    John Saxton

    I know this is an old request, but I still went ahead and +1’d it. I think it’s really important. For example, using the Big ERN SWR toolbox, I constructed a portfolio where one can spend $200K/year with a 8% chance of failure if you use all historical runs, but a 34% chance of failure if you constrain yourself to historical runs that started with a CAPE >= 20 and the market at an ATH. Those are meaningfully different results.

    As a workaround, I’m experimenting with reducing the starting value of all my equities by 10% or so.

    13 August