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Subject:  Re: The hocus plan: 4% from 100% FI? Date:  5/1/2003  4:20 PM
Author:  BenSolar Number:  104999 of 881679

Greetings, workwayless

However I wouldn't categorize the Intercst statement as a part of that BS.

TIPS, ibonds, and CDs? Come on, I think you are splitting hairs not to describe those as fixed income assets! Even though TIPS and ibonds are inflation protected you'd be hard-pressed to draw a yield that would allow a 4% SWR rate over the long haul.

How is it splitting hairs to say that inflation adjusted securities are not Fixed Income securities. They are not fixed! They vary! Here is intercst's analysis of the utility of TIPS:

He found that inflation adjusted securities with the coupon available when hocus retired provided a higher SWR than the 'optimal' stock/FI mix. Read it yourself.

In addition, most people are not in the position to count their personal residence as a part of the portfolio because they would have to willing to sell in order to cash in on it.

While he can't count the residence as part of the assets from which he makes a withdrawal, it is an asset of which the value varies with inflation. And it can be liquified later in life through any one of many strategies like downsizing, reverse mortgage, etc ...

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