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How To Tap Your Nest Egg & Not Go Broke
Old 07-15-2005, 10:28 PM   #1
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How To Tap Your Nest Egg & Not Go Broke

For those of you who want to let the financial servies industry tell you what your SWR should be, Businessweek has an article on the subject. My advice is to be afraid...be very afraid. (You will be invoiced separately for this sage advice.)

http://biz.yahoo.com/bizwk/050715/b3944402.html?.v=1

BusinessWeek Online
How To Tap Your Nest Egg -- And Not Go Broke
Friday July 15, 4:00 pm ET
By Anne Tergesen

"After years of cajoling baby boomers to invest for retirement, the financial-services industry is gearing up to advise people on how to spend their nest eggs without going broke. Along the way, the firms hope to attract some of the estimated $300 billion the boomers are expected to transfer annually from employer-sponsored retirement plans as they leave their jobs -- plus whatever other savings and investments they've accumulated."

"At the core of the new offerings is investment guidance designed to maximize the chances your money will last as long as you do. The programs also estimate how much you can afford to spend in retirement..."

REW
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Re: How To Tap Your Nest Egg & Not Go Broke
Old 07-15-2005, 10:35 PM   #2
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Re: How To Tap Your Nest Egg & Not Go Broke

I wonder how much they'll charge to tell you "4%."
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Re: How To Tap Your Nest Egg & Not Go Broke
Old 07-16-2005, 12:46 AM   #3
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Re: How To Tap Your Nest Egg & Not Go Broke

Quote:
Originally Posted by wabmester
I wonder how much they'll charge to tell you "4%."
I don't think that will happen. They are going to charge you 0.5% per year to tell you "3.5%".
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Re: How To Tap Your Nest Egg & Not Go Broke
Old 07-16-2005, 07:15 AM   #4
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Re: How To Tap Your Nest Egg & Not Go Broke

They did not come up with 4%.

I read the link and three companies came up with three different monthly withdrawal amounts of $8961, $4822, and $5802. These amount to annual withdrawals of about $107K, $58K, and $70K. The hypothetical couple in question had a $30K annual pension, a $2 million portfolio, and social security. To me, a 4% SWR would have been $80K, add in the pension and SS ... and you end up with an annual income of over $110K a year. So I don't understand the numbers given in the article, especially the $4822 number. Maybe they were going to give away $500K of their portfolio?
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Re: How To Tap Your Nest Egg & Not Go Broke
Old 07-16-2005, 09:51 AM   #5
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Re: How To Tap Your Nest Egg & Not Go Broke

These brokerages that are "selling" the ideal amounts required for retirement, are going to do quite well, in my opinion.

The woods are full of high earners that actually have never done much on their own, with the exception of large incomes.

The clients they are seeking, are by and large dependent on other folks for their everyday survival.

Brokers to handle their finances, Yard service,
part, or full time nannies, if they have children,
guides if they decide to go fly-fishing, packaged tours if they decide to travel, etc. etc.

It would be a stretch to imagine this type to be posting on an early retirement board.

They will undoubtedly, when they decide, enough may be enough to go to the broker that has been "handeling" their investments while working.

It would be very easy to shoot down the recommendations of the various "plans" put forward in this example by most posters on this board. The client will never know the difference, and if he has enough net-worth, it probably won't result in a busted retirement.

Wouldn't work for most of us, and we'll just have to rely on common sense, and self-education.

Jarhead











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