FinallyRetired
Thinks s/he gets paid by the post
- Joined
- Aug 1, 2002
- Messages
- 1,322
I plan to retire in 2 years. A couple of years ago, during the boom, I laid out an Excel safe withdrawal spreadsheet with an assumed (conservative then) 8.5% return and 4% withdrawal, which worked fine. After the market drop, I lowered my expectation to a 6.5% return in a 60/40 bond/stock mix, which was a bit tighter but still worked. Most balanced funds have historical returns at least this high over the period they report, which is usually from the early 90s (bull market). Given the latest market gyrations, which are starting to look like 1966, I tried to find historical returns from 66-82 but could not. I then went to the Dow's annual returns for that period, which were awful, with five years of double digit negative returns and a total return of less than 1% (by my calculation) over that period. Turns out most balanced funds are well correlated with the Dow, so if this holds, and we have another 66-82, many retirees will be in real trouble. After this exercise, I am seriously considering going to 100% TIPS during retirement. Thoughs? Anyone know where to find historical fund returns from 66-82?