Statisticians Make the Worst Clients

(This post originally appeared on Dr.Wade Pfau's Retirement Researcher Blog.)

A new client came to my office a few weeks ago, a statistics professor from the local university who had been referred to me by a mutual friend.

After a bit of small talk about our buddy, I asked how I could help.

“I have a million dollars in my 401(k) and I’m about to retire,” he informed me. “How much of that can I spend each year?”

“Well. . .”, I told him, “we financial planners like the Safe Withdrawal Rate Strategy. Invest your savings in a diversified portfolio of stocks and bonds and you can withdraw 4.5%, or $45,000 a year in your case, increased by the rate of inflation every year. Do that and your portfolio has a 95% chance of surviving for thirty years!”

He wrinkled his brow a bit.  “95%? What’s safe about that?”

Taken aback, I responded, “95% sounds pretty safe to me!”

“You are aware that the bankruptcy rate for Americans aged 65 and over is about 4.3 per thousand?”
“Well, yes. . .”, I stammered, “I mean, no. . .”

“That’s an average success rate of 99.6% for all retirement-aged Americans. 95% would be 12 times riskier than the average for my age.”

“Well, let me explain how it works,” I insisted.

I described the Trinity study and several since, about how they used rolling 10-, 20- and 30-year periods of market returns and how they keep subtracting a fixed withdrawal rate every year until they either reached the end of the 30-year cycle or depleted the portfolio.

He wasn’t persuaded.

“So, you’re telling me that these are the probabilities of success for retirees who would just keep spending the same amount every year, even when they were obviously approaching financial ruin? What does that have to do with me? I'd stop spending if I thought I was going broke. Wouldn’t you?”

“How does that matter?” I asked.

“That’s referred to as the unrepresentative sample fallacy,” he explained. “It’s like trying to infer the average height of Americans from the heights of NBA basketball players. You’re trying to infer a portfolio survival rate for the general population of retirees from a sample of people who would do nothing to avoid going bankrupt.”

I was beginning to think I didn't want any more statisticians for clients. Certainly not pedantic ones.

“Besides,” he added, “these study results clearly show that you can withdraw 4.5% of your portfolio value when you retire, then you can increase the withdrawal to about 6% of whatever savings you have left with 20 more years of retirement, and then increase withdrawals slowly to about 10% of whatever savings you have left at ten years. You can’t keep taking percentages of your original portfolio balance — finance doesn’t care how much money you used to have."

"Yes, but. . ." I countered.

 "You seem to think the withdrawal rates are somehow locked in on the day you retire. Why do you think those studies imply that I could withdraw the same amount every year, even if my portfolio drops in a bear market?”

“Because everyone says so!”

Finally, I had him.

“Here! Right here in Money magazine a few years ago." I thumped the magazine three times with my index finger for emphasis. "Walter Updegrave said it. He said it often, as have a lot of other people:”

“Withdraw no more than 4% of your portfolio the first year of retirement and then increase that amount for inflation each year and there will be roughly a 90% chance that your money will last at least 30 years.”

“So, now it’s 90%? That’s 24 times worse than average. But, regardless, Walter is wrong,” he insisted.

I had to admit that ole’ Walt had softened that statement a great deal since all those retirees lost their shorts in the 2008 market crash. Even Scott Burns, who wrote column after column praising SWR for the Dallas Star now calls that rule of thumb a “rule of dumb”. I decided to keep that to myself for now.

“You realize the numbers predicted by your SWR studies are a priori probabilities, right?”

The guy was really starting to get on my nerves.

“A priority, B priority. I never paid much attention to that stuff,” I replied.

“No, it’s a priori, not priority. It means those are the probabilities of success before retirement starts. After retirement begins and your portfolio goes up or down because you spend part of it or the stock market went up or down, those probabilities change.

You have a new conditional probability of success depending on how much longer your retirement will last and how much money you have left. If you want to keep your 95% probability of success throughout retirement, you'll have to spend less when your savings decline and you can spend more when they increase.”

“So?” I asserted with my best Dick Cheney false bravado.

 “So, that means you can’t predict how much money you will be able to spend in the future, because you can’t predict the balance of your portfolio. And isn’t that what you were trying to do all along? Withdraw a steady, predictable amount from a volatile portfolio?”

“Think of it this way,” he said as he pushed back his chair and stood up. “Let’s say 10,000 airplanes have left from San Francisco flying to Hawaii in the last several decades and 99% have successfully reached the islands. Every plane that takes off on that flight, based on historical data, has a 99% chance of success, right?”

“Sure”, I answered.

“So, if you're on that flight and a wing falls off over the Pacific Ocean and you are barreling into the sea, you should take very little comfort from the fact that your odds of reaching Honolulu were once 99%. You are now pretty firmly locked into that 1%.”

As he said this, he took his coat and headed for the door.

"And if you lost over half your portfolio in the 2008 market crash, you can't just keep spending like you used to have a lot more money — if you do, say hello to your new neighbors, the 5%."

“Wait!” I yelled. “We didn’t discuss your retirement plans!”

I’ve tried to reach him several times since to reschedule, but the guy won’t return my calls.

Maybe it was something I said.

Don't Forget Health Care Costs

I retired about seven years ago with meticulous financial plans. The bad news is that I have already encountered huge bumps in the financial road that no one could have foreseen and the good news is that I am somehow miraculously still on plan.

Thankfully, I did foresee that there were huge risks I would not be able to foresee and I planned for that by building lots of safety margin into my plan.

Someone once told me that there are known unknown risks (things that you know you don't know) and unknown unknown risks (what you don't know and don't know that you don't know) and it's always the unknown unknowns that get you. If that makes sense to you, then retirement planning will be a breeze.

A 56% decline in the stock market three years after I retired was the worst-case scenario and I got to experience it. (Word to the wise: my savings survived because I had a very heavy dose of bonds and cash.) Many weren't so lucky. Then one of my kids decided to become a doctor and got into med school. Didn't see that one coming.

Perhaps the biggest shock, though, has been the cost of health care. It's higher for me because I'm retired but have three kids in college, but I did foresee that.

According to a report in the New York Times today entitled Planning for Retirement? Don’t Forget Health Care Costs, for a 65-year-old couple retiring this year, the cost of health care in retirement will be $240,000 and that number is growing rapidly. That's about three times the median value of a 401(k) account for households approaching retirement. In other words, it's three times as much as most households have saved to pay for all retirement expenses.

The first problem with health care after retiring is simply finding someone who will insure you at a reasonable rate, or at an unreasonable rate for that matter. With a lot of research and a little finagling  I found policies for the five of us, but found the best approach was to get different policies from different carriers for each family member.

(Anyone who thinks they can get a voucher from the U.S. government and find someone to sell them health insurance after the age of 50 clearly doesn't understand the situation.)

When you reach age 65 you will be eligible for Medicare (at least I hope we will). That will be a huge help but it doesn't solve the problem. We tend to imagine that Medicare coverage will be similar to what we received from our employers, but it is not. According to the Employee Benefit Research Institute, Medicare covers only 51% of all medical services. Most households buy Medigap policies to cover the shortfall and that cost needs to  be built into your budget.

The Times article quotes a financial expert as recommending that you budget 5% of you income for health care costs, but that seems optimistic to me.

More details are available in the Times article. I will simply say that health care costs are a major risk to your retirement finances and often fall into the category of unknown unknowns from several perspectives.

The availability of health insurance, if your employer provide it, is another financial benefit of delaying retirement.

Estimate your retirement health care costs as best you can. And build in a lot of safety margin.

Estimating How Much Income You Need to Retire

Is 70% of your pre-retirement salary a good rule of thumb for estimating how much income you will need after you retire? How about 80%?

Though these are the guidelines frequently suggested by financial planners and writers, household income replacement ratios actually range from about 75% to about 95%, depending on how much you earn (see chart below created from a 2008 Aon Consulting  study). Oddly, the replacement ratio is highest when your household income is very low or very high, and lowest when you make $70,000 to $80,000. 

(Click any chart to enlarge.)

The replacement ratio is the percentage of your final working salary that you will need to maintain your standard of living in retirement. Once you stop working, that percent of your final salary will need to be replaced by Social Security benefits, personal retirement savings¹ and other sources of income.²

Based on the Aon numbers, 70% and 80% of pre-retirement income are not good estimates. You can see from the chart above that 70% never seems to work and 80% only works between about $50,000 and $120,000 of income. Earn more or less and 80% can be way off.

So, should we replace the 70% and 80% rules of thumb with the Aon tables?

Here’s the thing. Replacement ratios by themselves aren’t very interesting. As soon as someone says that you will need to replace say, 85% of your pre-retirement income when you stop working, you’re going to ask, “OK, so how much of that will Social Security cover?”

Because that’s what you really want to know, isn’t it? How much is your shortfall, or the amount of retirement income you will need that isn’t covered by Social Security?

The Aon study estimates shortfalls, too, and Social Security benefits. It even estimates your retirement savings, because you don’t have to contribute to retirement savings after you retire. So, if you’re earning $60,000 a year before you retire and you’re savings $10,000 a year in a 401(k), you only need $50,000 to maintain your standard of living after you retire.

From Aon Consulting report 2008.

Shortfalls, or the percentage of your retirement income that will not be covered by Social Security benefits, are indicated by the lighter blue stacks labelled "Other Sources" in the chart above.

Both the Social Security benefit and retirement savings assumptions have dramatic impacts on the shortfall that you calculate. The Aon Consulting study uses the average savings rate for each range of income, but we know that the average retirement savings rate is a pretty useless statistic.

Half of Americans about to retire have no retirement savings at all. Mitt Romney, on the other hand, reportedly has an IRA worth somewhere between $20M and $100M, and there are no doubt other very large IRA's at most income levels that distort the averages. That's why the median retirement savings account balance is much lower than the average at most income levels.

Your household may save a lot more or a lot less than the average for households with your income and that can throw off rules of thumb and the Aon estimates by a lot.

Similarly, Social Security benefits can vary widely between two households with the same income. The Aon study assumes that the household consists of a one-earner couple that will retire at full retirement age. Such a couple with an income of $50,000 just before retiring would receive an estimated $25,295 per year in Social Security retirement benefits. This is the Aon base case.

But a single retiree earning $50,000 and electing to receive benefits at age 62, as the majority or claimants do, would receive just $12,276 a year, and a couple delaying benefits until age 70 would receive over $32,000 a year. That creates a huge range of shortfalls.

The Aon tables provide a more accurate estimate than the 70% and 80% rules of thumb because they take income levels into consideration, but they don’t consider a range of Social Security benefits or savings rates, so they can still be highly inaccurate.

Ignore rules of thumb when planning for retirement. Either method can provide a dangerously incorrect estimate of your income requirements. At best, tables and rules of thumb are very broad generalizations. I recommend you calculate your own shortfall. I explain how to do that in my post, Closing the Shortfall — How Much to Save for Retirement.

With your shortfall you can calculate how much you need to save for retirement.

In my next couple of blogs, we'll look at how much personal retirement savings you will need to cover your shortfall.

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¹ 401(k) accounts, IRA’s, etc.

² Part time employment, a pension, rental income, etc.

Closing the Shortfall — How Much to Save for Retirement

How much money do you need to save for retirement?

Most retirees will pay for retirement with Social Security benefits and personal retirement savings they accumulated in 401(k) plans and IRA accounts. A few may have other sources of retirement income such as rental properties or a pension.

Author and investment adviser, William J. Bernstein, stated in the September 2012 issue of Money magazine that you should save 20 to 25 times your residual living expenses —  that is, the yearly shortfall you have to make up after Social Security and any pension.

The “shortfall” to which Bernstein refers is the cost of your desired retirement standard of living that Social Security benefits won’t cover.

If you need $60,000 a year after you retire to maintain your pre-retirement standard of living and Social Security benefits will provide $20,000, then you have a shortfall of $40,000 that needs to be met from personal retirement savings. If you don’t have enough personal savings to close that gap, your standard of living is going to decline, perhaps dramatically, once you retire.

There are four main factors in this equation to calculate the savings we need: taxes, annual retirement savings, expense reductions because you no longer work, and Social Security benefits. Let’s look at them one at a time.

The first factor is standard of living. We can start with your household income just before retirement. Let’s say you and your wife earn a combined $70,000 a year and plan to retire next year.  After you retire, you will no longer pay FICA taxes. Assume your pay stubs show that your wife pays $2,355 a year in FICA taxes and you pay $3,000, for a combined $5,355. You can subtract this $5,355 from $70,000 because FICA taxes don’t improve your pre-retirement standard of living. 

Your other federal taxes may decrease, too, along with state and local taxes. You should have your tax advisor calculate these taxes for your household before and after your expected retirement, but a 2008 study by Aon Consulting estimated these for various income ranges. I have included estimates from that report in the table below. The second row shows the percentage of your pre-retirement income you will no longer have to pay in FICA taxes after you retire and the third row shows an estimate of tax reductions in addition to FICA.

Data from Aon Consulting Study, 2008.

Aon estimates that taxes other than FICA will decrease 8.9% of pre-retirement income, saving $6,230 for a household earning $70,000 a year.

Retirement savings fall into the same category. After you retire, you will no longer need to save for retirement, right? Let’s assume you and your wife contribute a total of $4,000 (5.7%) to your company 401(k) plans.

I omitted Aon's estimates of retirement savings for the year before you retire because its easy and much more accurate to include your own actual savings rate. If you will save 5% of your pre-retirement income the year before you retire, for example, just add 5% to the percentage in the sixth row and subtract it form the percentage in the bottom row.

In our example above, if your income is $70,000 and you will save 5.7% of that amount the year before you retire, your Total Cost Reduction in Retirement would be 23% and your Income Replacement Ratio would decrease to 77%. On the other hand, if you were saving nothing for retirement that year, the percentages in the bottom two rows would be correct for your household.

The third factor, the reduction of your living expenses as a result of no longer working, is more difficult to predict because people do very different things after they retire. The Aon study, however, makes an attempt to estimate these and I have included them in fifth row of the table above. Note that for households with less than about $70,000, Aon estimates that these costs will actually increase. (See the study for their assumptions.)

Deduct 0.8% of $70,000 ($560) for expenses reductions and your $70,000 pre-retirement cost of living can now be purchased for $53,855 after you retire. Here's the math:

In our example, your replacement ratio, or the percentage of your pre-retirement income you must replace after retiring is about 83% if you aren't saving for retirement and about 77% if you are saving 5.7% of your pre-retirement income.

Note at this point that nearly all of your cost reductions in retirement come from lower taxes and no longer needing to save for retirement. Only a tiny part has come from the fact that your living expenses decline.

After calculating how our cost of living may change after we retire, the next factor in determining how much you need to save for retirement is how large your Social Security retirement benefits will be. You can get an estimate online at http://www.ssa.gov/estimator. Get estimates for both you and your spouse, if married. For our example, let’s say you learn that your combined Social Security benefits for your household will be $22,000 per year.

Now, we can calculate your shortfall, or how much of your pre-retirement income won't be covered by Social Security. Subtract the total of your Social Security benefits, or $22,000 in our example (31.4% of your pre-retirement income), from the cost of your after-retirement standard of living, or $53,855 in our example. Your shortfall is $31,900 per year in retirement, or about 46% of your $70,000 per year pre-retirement income.

Simply put, that means that you need to come up with an additional $31,900 a year after you retire to avoid a decline in your standard of living. 

The amount of savings you will need to accumulate to maintain your standard of living after you retire, according to Bernstein, is 20 to 25 times the amount of your shortfall.  For our example, you would need savings between $638,000 and $797,500 when you retire.

If you want to reverse the math and figure out how much you can spend each year of retirement for a given amount of savings, simply multiply the savings amount by 4% and 5% to get the endpoints of Bernstein’s range.

For reasons I will explain elsewhere, I use 4.5%.  For example, if you save a million dollars, you can spend about $45,000 a year from savings after you retire, though Bernstein would say you could spend between $40,000 and $50,000.

Our Broken Retirement System

The magnitude of the retirement problem America currently faces is difficult to comprehend.

Our retirement system is based on the assumption that the average Joe can save and successfully invest enough of his family's lifetime income in 401(k) and other retirement savings accounts to, with the help of Social Security benefits, maintain his standard of living after he retires. That requires accumulating at least hundreds of thousands of dollars of wealth in retirement accounts by roughly age 66, and perhaps a few million if your household income before retirement is six figures.

In the thirty years since the advent of the 401(k) plan and the beginning of the end of pension systems, few American households have been able to accumulate anywhere near those amounts.
The median value of a 401(k) account for someone approaching retirement age was recently $78,000.

Not millions. Not hundreds of thousands. $78,000.

Half of the retirees in the study — nearly 30 million American households— had no retirement savings at all. A lot of American households will simply drop out of the middle class when they retire.

Teresa Ghilarducci put it this way in a New York Times opinion piece entitled, "Our Ridiculous Approach to Retirement":

"The specter of downward mobility in retirement is a looming reality for both middle- and higher-income workers. Almost half of middle-class workers, 49 percent, will be poor or near poor in retirement, living on a food budget of about $5 a day."

Most Americans ages 50 to 64, 58 million of them in 2010, probably won’t have enough retirement assets to maintain their standard of living when they reach their mid-sixties, according to a 2012 study by the Schwartz Center for Economic Policy Analysis.

401(k) plans haven’t worked very well. Conservative talking heads love to say, "Boomers didn't save enough",  but it isn’t just Baby Boomers; Gen-Xers are even worse off based on their current 401(k) account balances. No generation has ever been asked to accumulate this much wealth and there is little reason to believe future generations will do better unless the system changes.

Will yours be one of the lucky households whose standard of living won't decline in retirement?

According to author and investment adviser, William J. Bernstein, you need to save 20 to 25 times your residual living expenses — that is, the yearly shortfall you have to make up after Social Security benefits and any pensions you might receive.

In it's simplest scenario, if you need $50,000 a year to maintain your current standard of living in retirement and Social Security benefits will cover $20,000 per year, your shortfall is $30,000. If that $30,000 is to come from your savings, you need 20 to 25 times that amount, or somewhere between $600,000 and $750,000 saved by the time you retire. If you don’t have enough personal savings to close that gap, your standard of living is going to decline, perhaps dramatically, once you retire.

The typical middle class American family approaching retirement has been able to save less than a quarter of what it needs to retire on, according to a study by the Center for Retirement Research at Boston College and reported in the Wall Street Journal in February 2011. That leaves most families highly dependent upon Social Security retirement benefits, which are meant to replace at most 30% of what you were earning before you retired.

For households that earn more, it will replace a smaller percentage. And that's at full retirement age, which is 66 for most people about to retire. Claim benefits at age 62 and they will replace perhaps 25%. So, figure on Social Security benefits replacing between a third and a fourth of your pre-retirement income.

What will it be like to live entirely off Social Security benefits? An article by Paul Sullivan in the New York Times in 2012 painted a picture. It isn’t pretty, but it’s what several tens of millions of Americans are facing.

Most people collecting Social Security benefits today have little or no other income.

Data collected by the Social Security Administration (SSA) from 2001 found that Social Security benefits provided more than half of the total income for almost two-thirds of retirement-aged households and provided at least 90% of income for a third of this group. That’s a lot of dependence on a benefit that is only meant to keep families off welfare.

The maximum annual Social Security workers benefit in 2012 is about $39,600 per spouse, but receiving a benefit that large would require that you paid the maximum in FICA taxes throughout your career (i.e., earned a lot of money) and that you delayed receiving Social Security benefits until age 70, when they max out. The average benefit is only $14,760 per individual per year.

So, the question you’re probably asking about now is, “How much money will I be able to spend when I retire?” For most households, the answer will depend on how large your (and your spouse’s) Social Security benefits will be and how much you have saved for retirement.

To answer the first question, go to the SSA’s website at http://www.ssa.gov/estimator/ and get an estimate of your retirement benefits and your spouse’s, if you are married.

The second question, “how much can I spend each year from my retirement savings?”, is a little more difficult. The answer will depend on how you choose to invest your retirement savings, but a ballpark estimate is 4.5% of your portfolio value on the day you retire. For example, if your retirement savings total $100,000 on the day you retire, you can spend about $4,500 from your savings annually and you can increase that amount by the rate of inflation each year. (Do not include home equity in your savings estimate.)

Here’s an example. Assume the SSA website estimates that you will receive $14,000 a year in workers benefits and your spouse is entitled to $7,000 a year in spousal benefits. The two of you have $100,000 saved in a 401(k) account. Your household will receive $21,000 a year in Social Security benefits and can spend $4,500 from savings. You can spend a total of $25,500 a year after you retire.

This is an estimate. There are steps you can take to increase your retirement income and mistakes you can make to decrease it. I will discuss those in future blog entries, and I cover them in my book, Retiring When Your 401(k) Fails.

(For a more detailed explanation of calculating the shortfall, see my post entitled, "Closing the Shortfall — How Much to Save for Retirement.")

Unless your pre-retirement earnings were relatively low, you probably need at least a quarter million dollars in retirement savings to avoid a decline in your standard of living after retirement. If a quarter million bucks sounds like a lot to save, keep in mind that it will only support about $11,250 of retirement spending per year (4.5%). Savings of $78,000 will support spending of about $3,510 a year.

Don’t be surprised if the income you calculate for your household in retirement is disturbingly low. For most households it will be. As I said at the beginning, most households haven’t been able to save nearly enough for retirement and Social Security benefits don’t go very far.

If you have saved enough, then give yourself a pat on the back. You succeeded where the vast majority of Americans have failed. If you failed, you have lots of company and winning this game is always a long-shot.

The American retirement system doesn’t work, except for the very lucky and the very wealthy, as a lot of households are about discover over the next few decades. I can't fix the U.S. retirement system, but I can help you make the best of a challenging situation. Please drop by my blog frequently for more information. (Oh, and did I mention my book, Retiring When Your 401(k) Fails?)

In future blogs, I’ll discuss some of the things you might do to improve your financial situation in retirement.

Don’t expect miracles, though. There are no easy answers.

The Basic Structure of Retirement Funding

While we work, we pay Social Security taxes (part of FICA) into a Social Security "account" and we save for retirement in a 401(k) or other type of retirement account. There is no actual Social Security "account" with our name on it, but there is a record of our earnings and of the FICA taxes we pay that will determine the amount of our Social Security benefits one day. Our employers withhold about 7.5% of our paycheck for FICA. About 6% is withheld for Social Security taxes and another nearly 1.5% is withheld for Medicare.

Our 401(k)s and IRAs are real accounts with real funds in them that we can withdraw at anytime. However, withdrawals made before age 62 are subject to taxes and penalties except under special circumstances. Our retirement savings accounts grow through more savings contributions from our paychecks and by investing our savings in assets we hope will grow in value, like stocks and bonds.

After we retire, our job income stops but the bills continue. We receive Social Security retirement benefits based on how much we paid in Social Security taxes. If we are able to accumulate retirement savings, we can spend about 4% to 4.5% of our savings total on the day we retire every year. This amount, added to Social Security benefits, will provide nearly all retirement income for most households.

For example, if we will receive $14,000 a year in Social Security benefits and have $100,000 in savings on the day we retire, we can spend $14,000 plus 4% of $100,000, for a total of $18,000 per year.

S&P 500 Returns for 30-Year Periods Before and After Inflation

Over various 30-year periods, the U.S. Stock market has had a fairly broad range of average returns. Depending on when your 30-year career began, the market could have returned between less than 3% and nearly 10% per year on average.

Average market returns are mostly irrelevant when applied to your retirement plan. If you are born 25 years before a great bull market you have an opportunity to make money in the stock market. If your working career spans a long bear market, your investment returns will be paltry.

Like it or not, your lifetime market returns depend largely on the accident of your birth date.

30-year Rolling Stock Market Returns

The largest factor for successfully accumulating wealth for retirement by investing in the stock market is the accident of when you were born. If you turn retirement age after a great 30-year run of stock market gains, you stand a better chance of funding your retirement. Workers who planned to retire in 2009, on the other hand, “picked” a poor year to be born. Their stock portfolios fell 30 percent, 40 percent or more at the very end of their careers.

The table below shows that if you were fortunate enough to be born in 1940 and turned retirement age in 2005, the last 30 years of your career saw the market gain 1,015 percent. But, if you were born just three years later in 1943 and retired in 2008, the market gained only 530 percent over the three decades before you retired.

If you were born in 1925 and retired in 1990, you saw the stock market gain only 256 percent over 30 years. Talking about being born under a bad sign!

Rolling 30-Year Investment Returns

30-Year Period	Average Annual Market Gain	After Inflation %	Total 30-yr Gain
1975-2005	13.1 %	8.4 %	1015 %
1974-2004	11.9 %	6.9 %	636 %
1950-1980	11.2 %	6.6 %	580 %
1978-2008	10.6 %	6.3 %	530 %
1954-1984	10.3 %	5.5 %	404 %
1952-1982	9.9 %	5.4 %	384 %
1956-1986	9.5 %	4.6 %	284 %
1960-1990	9.5 %	4.3 %	256 %