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Is SAFEMIN Safe Enough?


Not that kind of safe

“The first thirty years is for learning. The next thirty is for earning. The last thirty is for returning.”
–Sherwood Frey

When people think about retirement, they tend to look at financial security in retirement from one of two perspectives. They either look at how much they need to have saved up as a function of their income, such as the goal of having 12.5x annual income saved by age 60, or they look at a wage replacement ratio to try to figure out how much of their income they’ll need in retirement to maintain the same standard of living.

Dr. Wade Pfau, whom I highly regard published a paper in 2011 looking at historical data to see how much a person would have needed to save to be able to safely withdraw savings in retirement. By evaluating spending patterns in retirement and assuming that 50% of the income was accounted for by Social Security, Dr. Pfau determined how much someone would need to save to have an appropriate amount of assets to enable safe withdrawal.

The quick answer is that for someone with an asset allocation of equities/bonds of 60/40 who worked for 30 years and will be retired for 30 years, the safe minimum savings rate (SAFEMIN) was 16.62%.

Voila! Save 16.62%, work 30 years, retire for 30, die, and you’re done, right?

Maybe not.

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Jason Hull is a Fort Worth fee only, hourly financial planner who serves clients in Fort Worth, TX and Dallas, TX as well as serving clients nationwide.

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Hull Financial Planning is a Fort Worth, fee-only hourly financial advisor. The cities we serve in the Dallas-Fort Worth area include: 

Tarrant County: 
Arlington, Azle, Bedford, Benbrook, Blue Mound, Burleson, Colleyville, Crowley, Dalworthington Gardens, Edgecliff Village, Euless, Everman, Flower Mound, Forest Hill, Fort Worth, Grapevine, Grand Prairie, Haltom City, Haslet, Hurst, Keller, Kennedale, Lake Worth, Lakeside, Mansfield, Newark, North Richland Hills, Pantego, Pelican Bay, Rendon, Richland Hills, River Oaks, Saginaw, Sansom Park, Southlake, Trophy Club, Watauga, Westlake, Westover Hills, Westworth Village, and, White Settlement 

Dallas County: 
Addison, Balch Springs, Cedar Hill, Carrollton, Cockrell Hill, Combine, Coppell, Dallas, DeSoto, Duncanville, Farmers Branch, Ferris, Garland, Glenn Heights, Grand Prairie, Grapevine, Highland Park, Hutchins, Irving, Lancaster, Lewisville, Mesquite, Ovilla, Richardson, Rowlett, Sachse, Sand Branch, Seagoville, Sunnyvale, University Park, Wilmer, and, Wylie 

We also serve clients nationwide and can leverage technology to maintain our client contact and communication.


Hull Financial Planning, 2939 Crockett St. #315, Fort Worth TX 76107, (817)476-0584

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