You can’t control the future but you can control the likely shape of the future. In fact the whole 4 x25 rule is based on this, that somehow the future will look like the past. You only need a subset of the future to look like the past. You need the future to look like the past long enough for your plan to work until you become a carbon donor. Ever notice Curling? In Curling some joker throws a stone down a path of ice towards a bulls eye. Two other jokers have brooms and they slide along with the stone and sweep the way so the stone hits it’s mark. Victory has some component of luck but mostly application of doing what you can do to realize the result, aka risk control. The path of how this ballet plays out is not just accepting chance, but it’s encased in constantly changing the odds. I’m sure much drinking is involved as well perhaps changing the odds in another direction.
Poker is the same. In black jack the house has an 8% advantage. The advantage is due to the fact the house bets last so the player goes bust first. By correctly playing the player can reduce the houses odds to 0.2%, still a loser for the player but barely. The odds change because as cards are played, what’s left in the deck determines new odds with each hand and the fact the house has to live by betting rules. By understanding those changing odds and by judicious betting 0.2% negative goes positive and the player takes the advantage. If you get too good the house won’t play with you.
So retirement is not just abandoning yourself to chance but careful adherence to sweeping the path and correctly playing your cards and correctly betting, EVERY SINGLE THROW OR EVERY SINGLE HAND. The future plays out minute by minute not as an aggregate. Minute by minute is called accounting for sequence of return risk, aggregate is a future value calculator. People have trouble pulling the trigger because they are extremely risk averse. Their brains are wired that way. Your employer takes on the cost of your risk when he hires you. He pays for insurance, half your SS, makes sure all the government forms are filed on time, provides some retirement incentive etc. When you quit, all that risk cost comes back on you. If you have a plan that has dealt with the risk your pretty golden, if you have a plan that is based on some dumb assed formula you read on the internet.. ”At some point, we just have to decide that everything will be alright.” There is truth in that, but the truth is not inevitable and maybe not even probable.
I was playing with this the other day and I decided the formula should be a payout say 100K per year + a risk premium say 20K per year, for 120K per year and save x25 of that number. 3M instead of 2.5M. That would give you living expense plus risk premium expense. This is why people like 3 x33 because that just about equals living plus risk premium. You also have to include taxes based on yearly payouts and filing status etc. Sweep the ice!