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Old 05-29-2014, 10:24 AM   #41
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Just back from a New Orleans/Mississippi visit. Along the lines of 'you can never go home again' my old area is undergoing severe gentrification - McMansions on now 20 foot pilings, bulheads, boatlifts, long runs(piers) and a new bridge over Rigolets Pass.

1979 to 2005 I only met one neighbor who regularly got an alligator license. The bulk were shrimpers and crab fishermen with a few straight commercial fishermen.

Newly transferred from Denver I was immediately trained in the art of boiling seafood - shrimp, crab, and crawfish. Tryed alligator once - wasn't thrilled and saw the PBS tv specials on Nutria and never tryed it.

heh heh heh - All my friends from before Katrina are settled outside New Orleans with no immediate plans to move back. The Burbs are booming.
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Old 05-30-2014, 08:51 AM   #42
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I knew they had gator hunting, assumed it was like most other states where there are general seasonal licenses then special tags/stamps for certain other big critters. Out west you generally have to get lucky and win the draw to get a play at bear, mountain lion, bighorn sheep, etc.
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Old 05-30-2014, 09:15 AM   #43
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I think if you retire very early and expect to live another 50+ years, you need to have either a safety cushion of assets so if your investments go down by 40% you are still in good shape. Or have a plan B of going back to work if your investments tank during your first years of retirement.
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Old 05-30-2014, 11:31 AM   #44
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Quote:
Originally Posted by walkinwood View Post
Research some of the variable withdrawal schemes like Guyton and Bob Clyatt.

You're trying to fund a constant real stream of withdrawals from an uncertain return investment. You can do all the calculations you want, there is not "rule" that will enable you to claim anything approaching certainty.
+1
All this "analysis"/predictions/recency, confirmation bias (or is it?) makes my head hurt (although I'm thankful for the discussion!). AFAICT, Pfau's research is basically using valuations to say this time it's different. To his credit, he does say no one can predict the future. He, Bernstein, among others, simply advocate the safety first approach (build a floor for basic expenses using TIPS, annuitization, bond ladders, etc., then expose any leftover PF monies to risky assets such as stocks, bonds for upside).

Interestingly, PFau had lived the past few years in Japan, so I'm curious how much that country's woes influence his conservative approach. And yes, he, among others advocate using some kind of variable withdrawals (Guyton, et al), versus constant inflation adjusted withdrawals. All this has been discussed/debated before here and on the BH forum.

BTW, Pfau's acknowledges a safety first approach is expensive. I'll probably use/am using a combination of safety first and probability based planning.
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Old 05-30-2014, 11:45 AM   #45
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I've always been skeptical of SWR and the advice of financial and retirement gurus. Back in 1987 I chose TIAA-Traditional over the mutual fund option because of the guaranteed return. Since then I have invested in mutual funds, but will not be relying on them in retirement. I've always planned to fund retirement from sources that aren't
directly dependent on the performance of the S&P500 as I figured when we all had pensions or fixed annuities, we didn't have to worry about SWR or much about the CAPE.

I've arranged my ER so that I can live off rent, cash and my Stable Value fund from 52 to 59.5. After that a state pension, a TIAA-Traditional annuity and eventually UK and US social security will more than cover my expenses so that after 66 I plan to be adding to my equity investments with the goal of leaving money to my young relatives. My ER plan does not require me to spend any of my savings that are invested in mutual funds. Because I have my expenses covered by fixed income sources I can be aggressive with the rest of my money and have an 80/20 AA, the 20% bonds coming mostly from Wellesley.
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Old 05-30-2014, 12:59 PM   #46
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I just reminded myself that the OP was talking about WR for a really early retiree, perhaps in his 40s or even late 30s. So, the situation may not be of a real concern to pre-geezers like many of us here.

In my situation, my planned WR was 3.5%, which has dropped to 3.1% due to reduced spending and the rising stock market, but both of that can reverse at any time. But then, SS and Medicare will come on line later, which will help a lot, and if the market just muddles along and not crashes, I will be quite all right.

And if things go bad, really bad, I can just liquidate my homes, and drive off in my motorhome. The situation must be like near the end of the world, I think, and there will be a lot of people suffering a lot worse. So, what's there for me to worry about but my health? No money can buy that.

Still, I like to be able to keep my stash, and to die a millionaire. I love counting money, or rather let Quicken count and add it all up for me.

"Money is much more exciting than anything it buys." -- Mignon McLauglin
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Old 05-31-2014, 05:07 AM   #47
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Yes, my new takeaway is that once you have a reasonable horizon of 30 years or less the dynamics and math become different. This is in contrast to what many others seem to advocate (30 years = essentially the same as forever).

This is because for most the principal alone can cover almost the full period, as well as pensions, SS, inheritance etc .. being there for some support.

'Retirees' of 40 years old or less have no such buffer, and we have to rely fully on uncertain future income streams from capital.

One blessing is that we can more easily get backup income streams from working, but hey, that's not why many of us are on this forum are we
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Old 05-31-2014, 06:04 AM   #48
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Quote:
Originally Posted by Totoro View Post

This is because for most the principal alone can cover almost the full period, as well as pensions, SS, inheritance etc .. being there for some support.

'Retirees' of 40 years old or less have no such buffer, and we have to rely fully on uncertain future income streams from capital.
This board is pretty rarified. Most people don't have the principal to fund their retirement without capital appreciation and there is a common approach that spends down retirement investments to zero....I've never been comfortable with that.
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