Absolutely there is.This rule of thumb takes no account of any income a retiree might have from SS or a pension.In the "Four Pillars of Investing" Bernstein recommends capitalizing SS at about 5% (divide annual SS payment by 0.05) and pensions at 6-12% depending on the soundness of the company paying the pension.I personally would capitalize SS at 4% if I was going to use a 4% SWR, and other pensions at a 5-10% rate, but that is just because my estimate of the risk in SS is that is is negligible for any current retiree.Then apply the 40% rule to the total portfolio, including the "phantom" bonds arising from capitalization of SS and pensions.Many retirees will find that it is difficult to maintain enough of their portfolio in stocks. For instance, at 5%, $15k of annual SS payment is equivalent to $300k of bonds. Throw in a pension and you will need to have upwards of $500k in your portfolio before you should even consider bonds. DW and I both have pensions from very solid sources (hers is from a state government, mine is from a very large defense contractor), and SS. I feel very comfortable with 95% of our portfolio in stocks and rental real estate. If disaster ever overcame the portfolio, we would be able to make it quite nicely on the pensions plus SS.
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