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Subject: Re: Retirement Port Behavior 20002010  Date: 12/31/2010 11:03 AM  
Author: temsike  Number: 68042 of 95767  
I did the calculations longhand using year by year returns. The portfolio value I get on Dec 30 2010 is 47.4% of the initial portfolio value of $100 (in US$ of 2000). So for an initial port of $1M. After 11 years of 4% AWR using a 3% annual inflation rate, we'd have $474,000 today (in year 2000 US dollars). Somehow the first calculation is the accurate one. This is pretty scary indeed! In nominal terms, we'd have $657,000 left today. I used an initial portfolio value of $100 on Jan 1, 2000. I then subtracted $4. I then multiplied that number by the REAL return of the portfolio per year. Rinse and repeat 11 times. Real returns of retirement port (Inflation @ 3%): 2000: 29 2001: 2 2002: 22 2003: 43 2004: 10 2005: 2 2006: 11 2007: 3 2008: 30 2009: 36 2010: 12 

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