Hi
I hope my question this time wouldn't stir up to produce 16 pages of discussion. My question is this:
Would any of you be comfortable with well diversified 100% stocks/stock funds? If your initial reaction is NO, what if you can withdraw at less than 2%? Say, 1.5% or 1.2%? I think I would like 100% stock if I can live with about 2% annual draw. The reason is that by having 100% stock, the likelihood of your ability to increase the real withdrawal in the future is enhanced since the growth potential is higher. To quote intercst,
"TIPS allow a retiree to enjoy a smoother ride at some cost to the terminal value of the portfolio. Retirees in need of a 4% withdrawal (or more) may find this attractive. Retirees who can live comfortably on much less than a 4% withdrawal rate (say 1% to 3% of assets) may want to play the odds and stick with a mostly stock portfolio to maximize its value over time. These flush retirees already enjoy protection against stock market volatility completely depleting their retirement portfolios by virtue of a lower withdrawal rate."
http://www.retireearlyhomepage.com/novtips.html
The other reason I like it is its simplicity. You don't have to rebalance.
Regards,
amt
I hope my question this time wouldn't stir up to produce 16 pages of discussion. My question is this:
Would any of you be comfortable with well diversified 100% stocks/stock funds? If your initial reaction is NO, what if you can withdraw at less than 2%? Say, 1.5% or 1.2%? I think I would like 100% stock if I can live with about 2% annual draw. The reason is that by having 100% stock, the likelihood of your ability to increase the real withdrawal in the future is enhanced since the growth potential is higher. To quote intercst,
"TIPS allow a retiree to enjoy a smoother ride at some cost to the terminal value of the portfolio. Retirees in need of a 4% withdrawal (or more) may find this attractive. Retirees who can live comfortably on much less than a 4% withdrawal rate (say 1% to 3% of assets) may want to play the odds and stick with a mostly stock portfolio to maximize its value over time. These flush retirees already enjoy protection against stock market volatility completely depleting their retirement portfolios by virtue of a lower withdrawal rate."
http://www.retireearlyhomepage.com/novtips.html
The other reason I like it is its simplicity. You don't have to rebalance.
Regards,
amt