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Subject:  Re: Puzzled Date:  4/11/2000  7:03 PM
Author:  JAFO31 Number:  21126 of 78270

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hharri: "I am considering retiring at my present age of 59, and like so many others I am considering the problem of what I can withdraw from my portfolio to finance my retirement. As I read the discussions on what percentage of one's portfolio can be "safely" withdrawn, I am struck by how many people seem to be planning their retirement strategies based on the assumption (or fear) that they may live to be 85, 90 or more. And having assumed that, they then crunch inflation rates, market returns and a host of other things, all aimed at insuring that they will not, under any circumstances, run out of money before they die at the ripe old age which has been assumed."

It sounds like you have some familiarity with the Trinity study that one of the posters referenced. If you have not already done so, you may wish to check out The Retire Early board here on TMF (in Speakers' Corner) and should check out the Retire Early Home Page (which is maintained by "intercst") at":


"Now I will grant you that if you are in reasonably good health and retire at a relatively young age, you may have to live off of your assets for 30 or even 40 years. And you may be as physically and mentally fit at 85 as you were at 65. However, that is only one scenario, and as I read the discussions I am equally struck by how little consideration seems to be given to the other scenario, which is that you die in your sixties or seventies. Or, ten years down the road you cannot do the things you can do now, for whatever reason."

This is a very personal decision. I suspect that it is driven as much by fear, as anything else. While dying just as the last dollar is spent sounds appealing, we generally do not know when we will die, and outliving one's money is the least appealling alternative. Thus, it is a form of "worst" case planning.

In addition, the idea of re-entering the work force at 85 after 20 or 25 years retirement is not at all appealing to most people, and is probably not very feasible (at least with respect to the very well paying professions or executive jobs).

"I am, as I said, 59, and I have a portfolio of $1,000,000, a nice house on the Chesapeake Bay, some toys and no debt. That makes it feasible that I could retire, but my portfolio is not so great that it becomes a shoo-in. I am, as far as I know, in reasonably good health; however, I need only look at the obituaries and consider friends of mine who are already gone to realize that I may have only 10-15 years to live (or less). Or, I may have only 10-15 "good" years, meaning years in which I can do what I do now."

Or you could be in a car accident tomorrow; or maybe 30+ really good years. I have a great uncle who is 92+, still lives in his own home and takes care of his daily needs (but does hire out most maintenance work), still drives himself wherever he needs to go, and carries on pretty much as he has for the last 20 years.

What you did not mention at all is your budget or expected retirement budget. Alot of people would be long gone at your age and with your portfolio, but that is not feasible if you are accustomed to, and plan on continuing, a 200k budget. Actually there was an extended thread on The Retire Early board, quite some time ago, about how to measure and adjust a full-time work budget to a retired and not working budget; you can search for the thread, if you are interested (or maybe intercst will post the link).

Depending upon your numbers, you might divide your portfolio into to portions - one that would sustain minimally acceptable budget indefintitely and one that would support and could be consumed over the next 15 years to support the early extras while still young and healthy.

For example, 750k invested long-term (