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Subject:  Re: Lost Decade Recap Date:  12/7/2010  3:16 PM
Author:  akck Number:  4908 of 5232

Over the last 10 years, I've hit my investment target 4 times, however, I didn't know I has hit it until the third time. Over this time, my retirement age went from 66+ down to 60, the earliest I'd have health insurance without paying extra. The main reasons for reducing my retirement age are that my retirement income sources and retirement expense projections have firmed up. That is, I know within a few $$ what my DB and SS income will be and being within 3 years of retirement, I'm fairly certain of my expenses.

My investment target went from $1 million, when I didn't have any idea of what I would need, down to around $250k about 2 years ago. Retirement age was based on how long it would take to reach that target, so as the target reduced, so did the age. Likewise, my projected return varied as the target reduced, so I set up my spreadsheet to show returns from 3-18%. The idea was to determine what would be the smallest return that would get me to my target and invest accordingly.

I also copied the above spreadsheet page to predict the draw down on investments during retirement. The interesting thing here was that a 2% return would allow the portfolio to last for 35 years (my projected period), so anything better will leave an inheritance. I kept the inflation rate at 3% for expenses and 2% for income sources, mainly because a portion of expenses will have no inflation, for instance, mortgage expense before it goes away 4 years into retirement, which can then be re-directed to inflation and reduced income needs.

So, I've come out okay over the last decade, but it's been a wild ride. I can say this because I recently hit my retirement target again for the fourth time.
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