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<<Thanks a million for that link. 18 years ago! It's timely for me because I've asked to speak on sustainable withdrawal to a group next week. I was reading the first post in the thread and thinking, "Damn, who is this guy?" then looked up at the name and saw it was me. Funny. (Anyone here who would use correct grammar in that sentence -- "it was I?")<<

Yes, 18 years ago! Then it was an academic exercise, now I am newly retired and it is an actual issue. As it worked out, Mr. Concerned could probably have exercised his plan to put all his money in reits and take 10% a year. He would have had to pull the extra profits and put them into something safe, like treasuries (or your GNMA fund). Early on there were some very good years.

Below are the returns for the next 18 years. By my calculations had he taken $200K each year, plus 2% inflation, and invested any extra earnings in treasuries at the end of each year (at 3.5%) he would have gone below $2 million only once, in 2002, by over $100K. By the end of 2006 he would have had his $2MM in reits and $1.45MM in the treasuries. His annual draw by 2018 is up to $280K.

Had he just left all of his money invested in reits, with the same $200K plus inflation withdrawals, he would now have $1,6MM, almost $700K less. Still not bad since he only has 12 years of his 30 years left and is in his 80s now and probably slowing down.

REIT % REIT invested T bills invested
return start of year end of year
2001 13.93 2,000 79
2002 3.82 2,000 0
2003 37.13 1,954 471
2004 31.58 2,000 891
2005 12.16 2,000 934
2006 35.06 2,000 1,445
2007 -15.69 2,000 939
2008 -37.73 2,000 5
2009 27.99 2,000 364
2010 27.95 2,000 684
2011 8.28 2,000 618
2012 19.70 2,000 788
2013 2.86 2,000 613
2014 28.03 2,000 942
2015 2.83 2,000 756
2016 8.63 2,000 693
2017 8.67 2,000 618
2018 -4.04 2,000 281
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