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Subject:  Re: Retiring Jan 1 2002 Date:  11/27/2001  9:34 PM
Author:  rkmacdonald Number:  32664 of 88538

Author: glboat Date: 11/25/01 10:58 PM Number: 32636
I'm retiring in January and need income to supplement my social security. I will have about $225k to roll over. With the fixed income market like it is I would be interested in hearing some strategies for income.

You may already realize that the maximum historically safe annual withdrawal rate from a well diversified (80% equities, 20% bonds) portfolio is approximately 4% adjusted for inflation. So, for your $225K, if you diversify it properly, you can take an annual withdrawal of $9000, or $750 per month.

Given the expectation that stock market growth over the next 10 years will be around 6% as opposed to the historical norm of 11.2%, it makes a lot of sense to me to reduce equity exposure.

In my portfolio, I have chosen 50% equities, 40% bonds, and 10% cash. Also, I have 30% of the equity portion in REITs (ie, 15% of the overall portfolio in REITs).

It is my belief that this allocation will allow the best chance of surviving this downturn without seriously depleting my assets.

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