From the many data-packed charts to the carefully-worded posts that seek to explain complicated topics in ways everyone can understand, one of my highest-level goals of the site is to help make portfolio theory a little less confusing.  But as the site grows and I receive more feedback, I occasionally discover that my earlier choice of terms actually trips people up.  So when I run across a situation like my calculator naming convention not scaling properly to a larger audience, I occasionally have to backtrack for a moment to clear things up.

One particular term has been an unnecessary stumbling block since I first introduced it, and today I’m taking the opportunity to improve the site vocabulary a bit.  So if you’re a long-time user of the Withdrawal Rates or Financial Independence calculators, you may notice that the “sustainable” withdrawal rate has been replaced with the “perpetual” withdrawal rate.  The definition and the resulting numbers are exactly the same as before, and only the term has changed.

Why the swap?  Well, although I’ve always prominently shared the definitions for those terms in both the calculators and the charts, if one Googles “sustainable withdrawal rate” they are likely to run across various other writers who use that term interchangeably with “safe withdrawal rate”.  That naturally generates confusion, as the resulting definitions are not transferable across sites.

Luckily, there’s already precedent for a better term.  I decided to adopt “perpetual withdrawal rate” (PWR) to mirror Jim Otar’s research on the subject (and note that he uses “sustainable” interchangeably with “safe” — see what I mean?).  So now if you search for more information on perpetual withdrawal rates, you’ll be properly directed to other relevant sources rather than potentially led astray.

In order to minimize confusion for people browsing the site, I plan to modify the terms not only moving forward but also in old commentary.  That may take a little time to complete, but if you see a reference to a “Sustainable WR” that I missed, feel free to let me know.

Thanks to all who provided feedback on the subject.  And for those who are wondering what this safe versus perpetual talk is all about to begin with, be sure to check out the Withdrawal Rates calculator and its associated documentation.  Your future retired self will thank you later!