This Board Has Moved

This board has been migrated to our new platform! Check out the new home page at discussion.fool.com or click below to go directly to the new Board on the new site.

Go to the New Site
Message Font: Serif | Sans-Serif

No. of Recommendations: 3
This is a response to klouche's post: "Draw rates for screen blend in retirement". This is a topic that many of us have discussed to death on the "Retirement Investing" board and "The Retire Early Home Page" board.

I retired 4 years ago with the following strategy:
1. Divide the port value by 360 to determine the monthly draw
2. Start with 60 months of living expenses in a MMF
3. Every January, sell 4% of the stock portfolio value
4. Add the procedes to the MMF
5. Divide the MMF sum by 60 for your annual draw

For example, if you want to retire with a monthly income of \$1K, you need \$360K to start. You place \$60K in a MMF and keep \$300K in stocks. The following January, you sell 4% of your stock portfolio's value and add it to the MMF. You divide your MMF sum by 60 to get your monthly draw for the year.

Fellow Fool intercst has an incredible web page: http://www.geocities.com/WallStreet/8257/reindex.html dedicated to Foolish slackers like myself. You will find a wealth of information about what I like to call "Slacker Retirement".

Fool on!!

No. of Recommendations: 0
galeno wrote:
I retired 4 years ago with the following strategy:
1. Divide the port value by 360 to determine the monthly draw
2. Start with 60 months of living expenses in a MMF
3. Every January, sell 4% of the stock portfolio value
4. Add the procedes to the MMF
5. Divide the MMF sum by 60 for your annual draw

For example, if you want to retire with a monthly income of \$1K, you need \$360K to start. You place \$60K in a MMF and keep \$300K in stocks. The following January, you sell 4% of your stock portfolio's value and add it to the MMF. You divide your MMF sum by 60 to get your monthly draw for the year.

==============================

You can try different parameters for using galeno's method here:

www.phillysites.com/foolishness/galeno.htm

-bdfinney
No. of Recommendations: 0
<<You can try different parameters for using galeno's method here:>>
*******************************************************
Thanks bdfinney!! I thought you moved the page.
No. of Recommendations: 0
You can try different parameters for using galeno's method here:

www.phillysites.com/foolishness/galeno.htm

-bdfinney

Any chance of getting a link from your main page? I have your main page bookmarked, so I always go there first. Thanks.

volchris
No. of Recommendations: 0
Galeno, I'm curious as to how your retirement plan posted, on 8-3-1999, worked out. Did you make any changes?
No. of Recommendations: 1
AFAIKT galeno sticks to his 4%, period, stop thinking/discussing,
and is happy, heavy decission is behind him.

As far as I am able to figure it out,
better/safer and much more realistic is use of 2% draw.
I think many people on REHP board are slowly comming to realisation
that 4% is rather high.
OTOH most of those people migrated to NOFEEboards.com board
While 4% is "provable" as correct rate
issue of safety arrises during long period of drawdowns during market downturns.

In my own retirement I try to stick to
ether 2%
or half of actual gains, withewer is higher
averaging over 60 months is a must.

Gummy007 spreadsheet is a very handy tool to study withdrawal issues.
He also discusses at lenght an issue of safety.

http://home.golden.net/~pjponzo/gummy_stuff.htm
http://www.nofeeboards.com/boards/viewforum.php?f=2

JanSz