UnThreaded | Threaded | Whole Thread (318) | Ignore Thread Prev | Next
Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Re: Hi gang... wow!!! Date: 9/14/2013 7:18 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
Ray is running numbers with 100% S&P. Dave suggested a better comparison would be to have a 33% reserve and 66% invested in the market. This is similar to standard recommendations for asset allocation between stocks and bonds for long term retirement savings, where the goal of the bond portion it to reduce volatility at the price of reducing returns.

Ray, what do the numbers look like if you include a bond holding in addition to the S&P 500?


Well, the comparison I'm doing is S&P500 B&H compared to S&P500 with IUL rules, to compare like to like.
But, yes, I take your point. What I'd have to do is allow for different asset allocations. Right now it doesn't do that. But I have another spreadsheet which does -- except it handles only withdrawal. https://www.dropbox.com/s/xf4ma5blug27aws/SPY_Withdraw_by_Ca...
The technique is already done, I'd just need to incorporate it into this spreadsheet. Maybe a couple hours work, or less.

To do a quick SWAG right now:
Starting with $500K in Jan 1973, withdraw 4%/yr annual increase by CPI inflation. And remember that 1973 is a really bad time to start--so it's a good worst-case test.

The final (Jan 2013) account value is:
100% S&P, 0% T-bills:
$189,000 (But the account is headed for zero.) The Jan 2000 value was $1.5M

60% S&P, 40% T-bills:
$1,056,000. Jan 2000 value was $1.7M

66% S&P, 33% T-bills:
$1,263,000. Jan 2000 value was $1.9M

Same parameters, but Jan 1963 start, 40 year duration, ending value for Jan 2003:
100/0: $5,967,000 (Yup: Six million dollars.)

60/40: $3,260,000

66/33: $3,752,000
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (318) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
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