How so? Once you retire, you don't let dividends reinvest. Makes perfect sense.
If you plan to withdraw 4% per year, so you preserve your wealth indefinitely, you're more than 2 percentage points short when the dividend yield is 1.71% [1]
If you want to live solely from dividends, you'll need more than double the capital.
If you want to die with zero [2], it's impossible.
I'd much rather invest in a dividend-accumulating index fund and sell as I please.
[1] - https://www.multpl.com/s-p-500-dividend-yield
[2] - https://www.goodreads.com/book/show/52950915-die-with-zero
[1] https://www.investopedia.com/articles/markets/071616/history...
[2] https://www.spglobal.com/spdji/en/research/article/a-fundame...
If you really want to factor in the sell-off, then every dollar of dividend means one less dollar of sold stock. If dividends go higher than withdrawals for a year, then you need to buy more stock to compensate. So the math comes out the same. What you don't do is ignore dividends, or let excess dividends pile up in cash form. Which the original paper apparently did.
You don't let interests from bonds reinvest as well then.
I don’t know many people that spend 100 years in retirement.
