Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Help me fill in the blanks
Old 03-31-2006, 09:51 AM   #1
Recycles dryer sheets
 
Join Date: Jun 2004
Posts: 62
Help me fill in the blanks

Basic assumptions: Fully retired;* 3% WDR fills gap; Firecalc says 100% SWDR to age 100 with 50-50 equity/FI; recently on SS; assume inflation rate about 3.5%.

If short term interest rates reach ____% I would (A) make my equity weighting _____% (B) bid the stock market a fond farewell and put it all into ladderd CD's or some such.
__________________

__________________
oldcrowcall 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 Early-Retirement.org 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!

Re: Help me fill in the blanks
Old 03-31-2006, 10:13 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,517
Re: Help me fill in the blanks

The problem is that short term interest rates NEVER go high enough to beat inflation in the long run so you have to hold some equities to beat inflation.

If short term interest rates are high enough to "live off of" interest you can bet that your buying power is getting chipped away very quickly.

Audrey
__________________

__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Re: Help me fill in the blanks
Old 03-31-2006, 10:16 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Help me fill in the blanks

I have to agree with Audrey that your purchasing power could be pretty quickly eroded. However, if you bought TIPS or something like OSM (listed bond that pays CPI plus a spread), you might be able to set it and forget it. I'd still hold some equities, commodities, REITs, foreign bonds, etc., but you could probably get away with a prety heavy weighting in CPI-linked fixed income.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Help me fill in the blanks
Old 03-31-2006, 02:40 PM   #4
Recycles dryer sheets
 
Join Date: Jun 2004
Posts: 62
Re: Help me fill in the blanks

Right now a 1 year CD yields about 5% and the CPI-U is at about 3.5% annual rate. So, are you all saying that this is somewhat of an anomaly due to Fed actions or some reasons? I suppose that they have been long periods where short term rates had a negative real return. Duh! now that I think of it we are just coming out of such a thing.
__________________
oldcrowcall is offline   Reply With Quote
Re: Help me fill in the blanks
Old 03-31-2006, 02:51 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Help me fill in the blanks

And then you throw in the effect of taxes...
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Reply


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
Compact Discs Blanks BOBOT Other topics 9 03-13-2007 08:26 PM
Fill 'er up now or tomorrow morning wildcat Other topics 42 08-31-2005 01:26 PM
Who can fill me in on Tricare? mickeyd FIRE and Money 7 07-25-2004 01:18 PM

 

 
All times are GMT -6. The time now is 08:19 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.