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Subject:  Re: Others with un-retirement? Your ratio? Date:  11/10/2007  9:17 PM
Author:  Imaginistics Number:  1171 of 1911


Thanks for sharing what you're able to recall. I'm not suprised
you never paid attention to ratios, but I'm a bit suprised if you didn't worry about, and remember, an equivalent piece of information..that is, what percent of your total portfolio you took out that first year. For example taking out $40,000 out of 1,000,000 would be taking out 4% that first year, or $30,000 out of $500,00 would be taking out 6% of one's net worth, that first year..or maybe you didn't worry about what percent you were taking out? Me I worry enough to want to play it conservatively when I to take the plunge, going for 4% or less, but want a dose or reality to compare with what the talking heads (or writing heads ;-) who write all those personal finance articles...After all they may be making us worry too much, or too little, with that conventional wisdom, so was curious for stories of how much people had, if whether some people did ok while taking out more than 5% per year, or whether someone took out 4% or less but still got in trouble. It's cool if you don't remember the percent, just letting you know where I'm coming from as far as my curiosity.

By the way USA Today Fri Nov 9 page 3B has these factoids:

1. IF you retired in 1977 with $1,000,000 (which was worth
considerably more than than today, so a lot of money) but had it all in bonds..and took out 6% per year, you'd be broke, account would be emptied by 1998, 21 years into retirment. Same with short term Treasurey bills.

2. Investing same i stocks entirely would leave one with $12 million by 2007 (adjusting for inflation it's less than that but still a very nice sum)

3. BUT 100% stock portfolios are not a sure thing either since i fyou retired in 1972 yo uwould have been broke by 1985, under the same "take out 6% per year", "high inflation and lousy stock returns woul dhave clobbered your retirement savings"

A mix of 50%/50% or something close to that is what they recommend, yes, close to 50% stocks even at age 65, due to longer life spans, inflation risks, among other things.

I'm hoping to tak out 2% or 3%, not beucase I'm rich, but due to working part time (for a while at least) plus being pretty frugal, that way the total, and even the so called ratio, hopefully would get even better over time.

I simply try to maintain my IRA balance at (or above) what it was by limiting withdrawals vs what I'm able to do to adjust my investments.

If I understood you correctly, you have been skillful enough
as a trader of stocks to keep your net worth to be the same, or higher, than the previous year, even after your withdrawal?

Or does "Balance" refer to the mix of large cap, small cap, bonds, etc?

I would probably shock and horrify some by admitting that I've already withdrawn perhaps 10 or 11 percent this year, but the balance is still right up there, because of buys and sells made of various equities or mutual funds during the year.

Same question...just to make sure I followed you..

Enjoying the exchanges,

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