Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 03-13-2009, 09:33 AM   #21
Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 3,636
Originally Posted by Koolau View Post
And another thing (as JG) used to say, heh, heh.

It occurs to me that the "perfect" retirement plan would be to start with an annuity, "absolutely" indexed for inflation, to cover basic expenses and a (for example) S&P 500 index to provide some extras and an estate. I realize the annuity doesn't exist, but the OP plan doesn't actually exist, either - at least not in a packaged form. Personally, I'd prefer the annuity approach if it could ever be offered. The annuity addresses some of the issues of the OP's plan (e.g., paying too much for the "left overs" or running short at some point.)

This is all blue sky and off the cuff on my part. "Just saying..." as Jesse would say in Breaking Bad.
I've thought the same thing. In practice, almost all of us already have a "pretty good" indexed annuity in SS. Just wait to start collecting until the benefits equal your basic expenses. I've done this calculation for the two of us and it works out pretty well.

There are (or at least were) SPIAs on the market that were CPI indexed. They could be added if SS weren't quite enough.

Then, I can assign a chunk of our assets to cover the time period between now and when we start SS. This chunk is in fixed investments, TIPS if the time period is fairly long.

I could carve out aother chunk if I thought the gap between CPI and my personal inflation rate will be "too big". There's no ideal place to put this, but it seems that US fixed assets probably aren't the best idea.

The rest is "fun money". In theory we could blow it all on an around-the-world cruise while we're healthy and still have the basics covered for the rest of our lives. Even if we don't blow it all at once, it's still okay to spend most of it early in retirement while we're still healthy. It's also okay to invest it nearly anywhere. Low risk/reward if we want to be pretty sure how much we'll have available for fun. High risk/reward if we're okay with the "fun" financing being pretty variable.

Independent is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Sharpe says... mickeyd FIRE and Money 0 05-24-2008 11:09 AM
William Sharpe interview - "lockbox strategy for retirement spending" DblDoc FIRE and Money 18 05-23-2008 09:34 AM
Does your employer sponsored 401k plan utilize a third party plan advisor? Disappointed FIRE and Money 13 03-25-2008 03:12 AM
Stock Market Decline-Tests your beliefs - Have a plan and work the plan dex FIRE and Money 21 08-18-2007 01:24 PM
Bill Sharpe gives CAPM a makeover Nords FIRE and Money 9 10-09-2006 03:51 PM


All times are GMT -6. The time now is 05:21 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.