UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: telegraph Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 63310  
Subject: Re: Hocus Foil Wade Pfau in the WSJ Date: 3/7/2013 9:37 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
"So many questions: 1- How did he keep the mix 50/50??? Does he have access to some kind of new annuity that allows him to rebalance? 2- What do you mean "based on current market conditions"? Does that mean he assumed the market would always perform exactly as it is today? That seems like a pretty brain-dead assumption. 3- How much survivability did he really gain over bonds using this mix? 4- And of course there is the question of using Monte Carlo. There is a lot of underlying assumption built into any Monte Carlo analysis."


Well, I used the 4% rule when I retired 14 years ago. As a maximum.....and figured I could live nicely.

Well, since I was LBYM my whole life, there was no way I was going to spend 4% a year.....so I chugged along at 3% or so.

Yeah...the market turned south......my portfolio sagged a bit....but taking just under 3% didn't phase me since most of my income was interest (those lovely 6-7% CDs) and dividends from my stocks.....and I actually had to re-invest each year.

So here I sit 14 years later,....now collecting SS.....and a teeny pension...which pays 80% of the bills for survival. SO the nest egg now has to provide 1/3rd or so of the living expenses and then it's all fun money , new car money every 10 years, etc.....

Of course, for those who are going to get SS....for a medium earning couple...they could collect 50K a year in benefits if both worked 35 years and maxed out their SS. Medicare would cost each $200-350 depending upon their retirement income.....but they'll clear a good chunk of change each year.


If either gets a pension....fat city, right?


But....depending upon your lifestyle.....you really don't need gazillions.....


If your house is paid for...your kids off , married, through college.....and you are debt free......it's a whole lot easier...

Now....with the dividend yield down (Stocks up)...and interest at 1.5% on a good day.....your nest egg is going to spin off less. I've moved money into REITS and GNMA to make up some of the income stream loss. The money in the IRA is 1/3rd in TIPs, 1/4 in GNNA, the rest big stock index fund. Haven't touched it yet.

I figure now at 66 going on 67, I don't really need a 30 year time period. 20 is optimistic based upon my family history and my medical history.........

If I were retiring today.....I'd be very shaky with a 4% withdrawal with the low bond rates.....and the high stock prices......

Of course, you can read up on your Scott Burns...and his plan where when you are younger, you spend more. As you hit the late 70s, you aren't as likely to want to travel and spend money, buy new cars and things.....and once you hit 80, most are going to spend even less.



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

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:
Macro Economics

Looking at Currency Ratios
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