For retirees, a massive market crash on day one is less dangerous than simply living too long.
April 14, 2026
Original Paper
Forever is a Long Time: Safe withdrawal Rates for Perpetual Horizons in Heston Markets
SSRN · 6450960
The Takeaway
While financial advisors obsess over "sequence of returns risk" (an early crash), the math shows that for a perpetual horizon, the crash is marginal. The true existential threat to wealth is the "infinite time horizon" itself, which creates an inevitable mathematical drain on assets.
From the abstract
The determination of a Safe Withdrawal Rate (SWR) for ultra-long retirement horizons remains a central challenge in lifecycle nance, exposing the structural fragilities of static heuristics like the widely cited 4% rule. Traditional frequentist calibrations rely on path-dependent historical simulations, failing to rigorously price the sequence-of-returns risk associated with stochastic volatility, leverage eects, and macroeconomic valuation bubbles. This paper reconciles the empirical demands of