To bring greater realism to the discussion of safe withdrawal rates in retirement, he focused his attention on what he later called the “SAFEMAX”—the highest sustainable withdrawal rate for the worst-case retirement scenario in the historical period. With a fixed 50/50 allocation for stocks and bonds, the SAFEMAX was 4.15 percent, and it occurred for a new hypothetical retiree in 1966 who experienced the 1966–1995 market returns. Searching for this “worst-case scenario” puts the focus on spending conservatively.
