Dynamic SWR #

The Dynamic SWR method was created by James Jones from Nesteggly. He came up with a novel approach to determining annual withdrawals: consider that you're writing yourself an inflation-adjusted annuity funded by your retirement savings.

The result of this is a strategy that shares many similarities to the VPW strategy. If the Maximize Spending strategies appeal to you, then it may be worth comparing VPW and Dynamic SWR to see which one makes the most sense to you.

Strengths #

  • Adapts to market conditions, ensuring your portfolio never runs out of money prematurely
  • Ensures that you spend as much money as possible during your retirement

Weaknesses #

  • Withdrawal amounts can vary considerably based on market conditions
  • Following the algorithm toward the end of your estimated retirement may create problems. We can never know how long we will actually live.