Be aware cat pricing has been under pressure in recent years due to the flood of dumb money into the space.
It has sold off significantly after this year Hurricane, floods and fire damage. Looks like attractive to me, but I am dumb money. who knows https://www.marketwatch.com/investing/fund/srrix/charts
The loss is relatively small, considering the intensity of hurricane activity this year. Lots of dip-buyers have come in.
The last part first: I have paid into Japanese nenkin and thus know how little it is that they will pay out by the time I reach the retirement age. That nenkin, plus the 1.1 M JPY from your calculation sheet is hardly enough to live of. I know that I would not be able to live of it. And those shareholder goodies are fun to receive, but don't help you much if you need food on your table.
The thing is you can only get what you have saved. When you only put in little money you can't expect to suddenly withdraw huge amount. Here is a revised calculation with 1.5% dividend assumed and reinvested, also saving rate reduced to 15% and contribution curve smoothed. (I don't have dividend data in old times) I don't know why people can complain about poor return when you get this sort of return with low inflation. One of the trap here is to assume you were a baller in 1989 and way overspend. I agree that most people would fall for it and just withdraw 4% of total networth thinking it is safe. If you blow through the retirement fund in early 1990s then you really would be eating cat food. Easy to make decision in hindsight though, I would also think I were an investment god in 1989.
Currently Nikkei pays 1.4% with PE of around 20. Is it safe to assume 1.5% dividend yield when the index was trading above 100 PE? You are also assuming withdrawal amount of around 27% avg. salary in 1990. General rule of thumb is 60% to 80% of retirement salary. It is very difficult to change life habits from 100% salary to just 27% salary in very short time. Another way to look at it, you are withdrawing 1.4% per year from your total investment, but dividend yield is also 1.4%. In inflation free world, this retirement fund will last till perpetuity. I looked from inflation adjusted total return money, with 3% withdrawal. This pie will run out in 2004. 2% withdrawal, it will run out in 2011
No, but the bubble only last a couple of years. You also have periods after the crash when the dividend more than 2%. If you have the dividend data I would be glad to update my calculation. Add in national pension (pay about 25% of an average guy salary) and stock holder benefits (can yield >1%), it is not all that unreasonable. Now you are just arguing the guy aren't saving enough. How about running the same number on other investment targets? I agree in the last post that if you withdraw based on the bubble number, the fund will not last. However I am not really sure if that guy invest in S&P 500 instead, he would be much better. Japanese bond is doing well though.