Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next
Author: Hyperborea Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5082  
Subject: Re: Funding future needs Date: 8/8/2003 11:04 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 3
I was pretty conservative in my calculations, figuring a pretty high inflation rate (5%) and a pretty low investment return rate (8%), but I figured it's better to over-estimate what we'll need than to under estimate. If you believe these figures will be different, then you'll come up with very different results.

Using historical data to test portfolio withdrawal survival the number is only 4% for a 30 year withdrawal not running out of cash and about 3.8% for the ending balance to be the same as the starting balance. This is a bit higher than you estimate but not by much. Now this would survive the worst time periods in the historical record but most time periods are not the worst and the probability is high (though not guaranteed) that your portfolio after 30 years would be quite a bit larger than at the start.

This would cut your stash down to $1.47M if you aim to keep the start and end values the same as the worst case.

http://rehphome.tripod.com/moresafe.html

Hyperborea
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Dividend Growth Investing

Good Time for Dividend Champions?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement