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The issue of asset allocation of your nestegg in terms of percentage of assets in equities vs bonds has been covered in a paper written by P.L. Cooley, C.M. Hubbard, and D.T. Walz entitled "Retirement Savings: Choosing a Withdrawal Rate That is Sustainable". The paper appeared in the AAII Journal of Feb. 1998. The conclusions were that if you are retired for 25 to 30 years you should not withdraw more than 3% of your nestegg per year or there is a finite risk of depletion.
I suggest you decide how much you will need per year after adjusting for inflation and calculate what size nestegg you need. This will probably be in excess of 33 times what you will be withdrawing per year.
If you have a $2 million nestegg, you can probably safely live on $60,000 per year in 1999 dollars for at least 30 years.
If it costs $120k per year, you have a 25%chance of becoming homeless in 20 years if you have invested 100% in stocks. The probability of homelessness in 20 years increases to 53% if your allocation is 75% bonds.
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