Optimal Finance Daily · Friday, August 14, 2026
While acknowledging that using historical market data for retirement planning is compelling and better than many alternatives, Darrow Kirkpatrick identifies two significant flaws. The approach assumes the future will mirror the past and neglects to consider current market valuations, which Wade Fow has shown to be highly correlated with safe withdrawal rates.
“An approach to retirement planning based on market history is compelling, and better than many of the alternatives, but it still has serious flaws.”
“Number one, it assumes that the future will be like the past. And number two, it ignores current market valuations.”
“Researcher Wade Fow has used historical return data to show that safe withdrawal rates for portfolios are highly correlated to the level of the stock market at the time of retirement.”