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Author: JoeVM Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76094  
Subject: allocation Date: 2/21/1999 6:33 PM
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Hi,
I,m interested in your opinion regarding the allocation of retirement assets. My wife and I have no sources for retirement income other than our personal savings. We would like to know how much we would have to accummulate to have a 50,ooo dollar net income. If we were to invest in the FF, an S&P 500 index, and some sort of bond or money market fund inequal amounts.
We hope this will give us some growth and some income and the flexibility to tap into whichever source provides the best return for the year.
More importantly does this appear to be a sensible stategy? We are new to Fooldom but have been investing in mutual funds for sometime and are comfortable with making the leap to directing our own investments rather than relying on our broker. We are both 45 years old and would like to know how much more we need to accummulate.
Thank you for your advice and information
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Author: tmackfool Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 8699 of 76094
Subject: Re: allocation Date: 2/21/1999 6:57 PM
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Hi,
I,m interested in your opinion regarding the allocation of retirement assets. My wife and I have no sources for retirement income other than our personal savings. We would like to know how much we would have to accummulate to have a 50,ooo dollar net income. If we were to invest in the FF, an S&P 500 index, and some sort of bond or money market fund inequal amounts. We hope this will give us some growth and some income and the flexibility to tap into whichever source provides the best return for the year. More importantly does this appear to be a sensible stategy? We are new to Fooldom but have been investing in mutual funds for sometime and are comfortable with making the leap to directing our own investments rather than relying on our broker. We are both 45 years old and would like to
know how much more we need to accummulate.
Thank you for your advice and information



Here are a couple of sites to try for retirement planning and calculating savings for future income:

Quicken.com's Retirement Planner:
http://www.quicken.com/retirement
(when the page comes up, look towards the upper right corner for the link to the Retirement Planner)

Valic's Retirement Income Calculator:
http://www.valic.com/eric/
(from this page continue and it will take you to the usual disclaimer before the calculator)

Motley Fool's Retirement Planning Calculator:
http://www.fool.com/calcs/retirelist.htm
( I couldn't get the page to load correctly today, but it should work when you click on it)

Motley Fool's Savings Calculators:
http://www.fool.com/calcs/savlist.htm

A great site with loads of info on retirement planning is, of course,
Motley Fools Retirement Planning Page:
http://www.fool.com/Retirement/Retirement.htm

I sure learned a lot by just going back through the posts on this message board and reading questions and replies, especially those by Pixy! He's been a big help and source of information.

Hope those web sites help out.

Taylor

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 8704 of 76094
Subject: Re: allocation Date: 2/22/1999 8:57 AM
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Greetings, JoeVM, and welcome. You asked:

<<I,m interested in your opinion regarding the allocation of retirement assets. My wife and I have no sources for retirement income other than our personal savings. We would like to know how much we would have to accummulate to have a 50,ooo dollar net income. If we were to invest in the FF, an S&P 500 index, and some sort of bond or money market fund inequal amounts.
We hope this will give us some growth and some income and the flexibility to tap into whichever source provides the best return for the year.
More importantly does this appear to be a sensible stategy? We are new to Fooldom but have been investing in mutual funds for sometime and are comfortable with making the leap to directing our own investments rather than relying on our broker. We are both 45 years old and would like to know how much more we need to accummulate.>>


Taylor aka Tmackfool gave you a series of links that will assist you in determining what you need to save and how much you need to have on hand when you retire. Much depends on your assumptions regarding rates of return, inflation, desired income, use of capital in retirement, estate planning desires (i.e., how much you wish to leave behind), and your life expectancies. Change any of these things, and the results you get will change. Thus, you should revisit this issue often to ensure you're on the right track.

As to your desired allocation, that's strictly up to you based on your comfort level with taking risk, both now and in retirement. How you spread your savings, though, will affect your rate of return. Let's say you can average annually 18% in the Foolish Four, 10.5% in the S&P 500 Index fund, and 6% in bonds. Placing one-third of your savings in those vehicles each year means your total portfolio will average 6% + 3.5% + 2% = 11.5% per year provided those assumptions hold true. Change the proportion of those vehicles in your portfolio, and the total portfolio return changes. Switch to a one-fourth ratio in the FF, one-fourth in the S&P, and one-half in bonds and the return drops to 4.5% + 2.625% + 3% = 10.125% . Over a 20-year period that 1.375% difference can mean some big bucks. Thus, you must also select your allocation with care to ensure you can reach your ultimate goal with the least possible pain.

Regards….Pixy


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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 8705 of 76094
Subject: Re: allocation Date: 2/22/1999 9:03 AM
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Taylor sez:

<<I sure learned a lot by just going back through the posts on this message board and reading questions and replies, especially those by Pixy! He's been a big help and source of information.>>

Go ahead, make me blush. :-) But please tell me -- How do I get Mrs. Pixy to stop her hysterical laughter? She read your words and just went flaky on me. It's very disconcerting. I just can't understand her attitude at all sometimes.

Regards....Pixy

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Author: JoeVM Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 8735 of 76094
Subject: Re: allocation Date: 2/22/1999 11:48 PM
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I want to thank both of you for your help. I see that we need to spend some more time on reasearch and thought. We will do that and hopefully come up with some firm numbers in the near future.
once again our thanks

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Author: rspires One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 8747 of 76094
Subject: Re: allocation Date: 2/23/1999 4:16 PM
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JoeVM wrote: I see that we need to spend some more time on reasearch and thought.
As a part of the research, I suggest you also look at the following Sites on Allocations and rate of draw against your savings:
http://www.geocities.com/WallStreet/8257/roth2.html
http://www.geocities.com/WallStreet/8257/reindex.html

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