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Subject:  Re: Rate of withdrawal Date:  2/8/2005  7:26 PM
Author:  ziggy29 Number:  3077 of 5276

>> The 4% SWR with the 80/20 stock/bond mix (or was it 75/25?) was the one where you didn't run out of money in the 30 year period even if you retired at the worst possible time. <<

I suppose it depends on the age at which you retire and/or the number of years you assume you have left, but it seems like the "sweet spot" in the stock/bond mix is anywhere from 60% to 75% in stocks.

>> There was a link recently on REHP where using I-bonds got to 6%, although some assumptions were made. <<

That requires a lot of assumptions, IMO.

I have about $5,000 (current value) in I-bonds which I purchased in January 2000. At that time, the fixed rate component alone was 3.4%. Today, they yield about 6% with no realistic risk.

Yes, if you can get that kind of deal, assuming you were allowed to buy enough of it, I'd bet it's possible to notch up the SWR to 5% if not 6%. I wish I had another crack at that today with the cash I have ready, believe you me. If only that would have held until I sold that California real estate. Talk about a supercharged emergency fund...

But what's the fixed rate today? 1%, I think? It's a lot harder to make a higher SWR hold up with only 1% above inflation. Even then, it's not a bad place to put a percentage of your worth when you're older and weigh more toward capital preservation, but still...

What a strange world we live in. In January 2000, before the dotcoms popped, people laughed at a guaranteed inflation-plus-3.4% return. Yikes.

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