Greetings, John Power, and welcome.<<I think that the fool's strategy and Bob's both fall under the category ofconventional wisdom (CW) on retirement. Let me define what I consider the CW.Assumption: You are a person who relies on 401(k)'s and IRA's to prepare for retirement.While you are young, say under 45, your retirement money is 100% in equities. As you approach 65, you gradually shift to a 50/50 mix of equities and fixed income investments. You then try to live off a combination of the interest from the fixed and begin to draw down on the equity.The major problem with the CW is that you run the risk of outliving your money if you draw down the equity portion too quickly. Since we all have deep seeded images of eating cat food we decided to error on the conservative side and only use a small portion of the money and rationalize that we can pass our nest egg along to our heirs.>>It's obvious to me you have little understanding of the Foolish Filosophy for retirement investing. Where or how you obtained the idea that we subscribe to a theory that in retirement we should keep a 50/50 mix is beyond me. Look under the thread "Retiree Portfolios" in this folder and you'll find a whole grouping of messages on this topic where we outline a number of theories. Further, we specifically highlight the problems you outline. Analyses have been run using different portfolio mixes to show the impact of historical returns under all conditions and the ravaging effects of inflation. Indeed if anything, those analyses indicate a 100% equities position would be better equipped to last a lifetime while concurrently meeting an inflationary bugaboo than anything else.<<At this moment a 70 year old can buy an annuity thatwill pay 12% !!!! for the remainder of his life. Atthis high rate we also don't need nearly as muchmoney to generate the same amount of retirement incomeas does someone who follows the CW. This meansyou can spend more now while you are alive, ratherthan passing it along to your heirs and uncle samewhen you are dead.In summary:1)there is no risk of out living your money!2)you don't need as much money!>>Perhaps a 70-year-old can buy an annuity today that will enable a 12% withdrawal of the investment per year over his lifetime. I really can't say. If so and that's what the person wants to do, I say have at it. But that will more than likely be a fixed annuity. Live another 20 years, and at 3.5% inflation it will buy half of what it does today. That, friend, is a steep price to pay for "security." The only way to protect against declining purchasing power is through equities. And unless it's a joint and survivor annuity, it's more than probable this vehicle will leave nothing for heirs, unlike a portfolio sitting at investment.How one arranges for income in retirement is a personal matter. Many like the "security" of an annuity. Me? I don't. I think they have more danger to a long-lived person than an investment portfolio loaded with equities. And annuities definitely don't fit into the Foolish Filosophy.Regards....Pixy
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