No. of Recommendations: 2
Are we ready to get past the vituperation?
I sure am.
I'm just in this for the money. I go wherever the number take me.
More money = good, less money = bad.

I'll get my emotional jollies by watching a ball game. I'll get the excitement going by yelling at those kids to get off my lawn.

I've been working on the subject that Dave brought up -- deccumulation or planned systematic withdrawals from the portfolio. Still don't have a good handle of what Dave's looking for, guess he'll explain it better when he gets back from vacation.

I kinda merged some of the scenarios that Dave & CC have mentioned, trying to get a better handle of a complete lifeline, and came up with this. A 30 year accumulation period was mentioned, with initial deposit and periodic monthly deposits. Also mentioned was a 10 year withdraw plan.
A ten year period seems too short, I'm more used to looking at 25-30 year periods.

What I came with was a 52 year scenario, 26 of accumulation followed by 26 of deccumulation. Dave seemed to be very interested in the total amount withdrawn, to the exclusion of factors that I usually think of a more important. But ... whatever. Different people have different interests.

The typical downdraw plan I'm accustomed to has an initial rate of X% of the beginning portfolio value, which is increased on each annual anniversary by inflation rate of the previous year. The initial rate is used ONLY to determine the 1st year withdrawal. After that, the draw is the dollar amount plus the inflation percentaqe.
The things that are of particular interest are: 1) the income provided by the draw, and 2) the ending final value after 25-30 years. Failure is defined as hitting a zero account balance.

Here's what I get for the 3 strategies:

52 year period, grow during first 26 years, then withdrawals for 26 years.
S&P500, $10,000 initial deposit, add $100/mo for 26 years, then begin withdrawing,
Starting at 5% (annual) of the 1/1/1986 value, increasing at rate of 2.5% each year for inflation.
Accumulating 1/1/1960 to 1/1/1986
Deccumulate 1/1/1986 thru 12/31/2012

Strat. Value at Init. Total Final Val *During withdraw period*
yr 26 (Mnth) W/D 12/31/2012 Lo Value Hi Value
B&H $230,900 $962 $437,600 $1,573,000 $231,000 $1,658,000
SMA $208,400 $868 $395,000 $1,250,000 $209,000 $1,297,000
IUL $115,000 $479 $218,000 $210,000 $116,000 $271,000

Of course, this is just one specific market conditions -- the actual history of the 1960-2013 market. The results would be different with other market history.

The IUL has the lowest monthly draw and the lowest final value.
None of the strategies ever reached a low value that was close to zero.
The IUL paid out only half the income, both monthly and in toto, and had a only a fraction of the final value.

The monthly draw for the last (26'th) year was almost double the draw of the 1st year of the withdrawal phase (not shown here).
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