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Old 12-14-2012, 04:56 PM   #21
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I wasn't commenting on your post - I was commenting on the OPs post. I actually don't give a hoot about your "analysis'.

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One way I have looked alternatives is by having my baseline plan (which is SS at age 70) in Quicken Lifetime Planner - then you can easily do a what if to see how you nestegg would fare with the same assumptions other than changing SS to age 62 or FRA and see the effect of each scenario. While it is deterministic rather than stochastic, it can give you an idea of the effect on your nestegg.

You could do something similar in Firecalc and compare the printed graphs, range of ending nesteggs, average ending nestegg, number of failures, etc.
why is it that you are so dismissive of my analysis but free to offer your own? open your mind a little.


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It is well accepted that for singles that the decision is supposed to be actuarially neutral, so if that is the case and you have specific insights as to your longevity compared to average longevity, it would be a significant factor in the decision.
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He has to do the math as it pertains to taxes. Whether he has a substantial amount in after tax account vs taxable IRA/401K accounts. He should look at how his SS is taxed in the State that he resides. He should make a realistic assessment on how much his investments earn and how that amount will extend his break-even date. Once that is done then look at how long he can realistically expect to live. Run the math then make an educated decision.
all this talk of actuarially neutral and break even dates have nothing to do with trying to maximize the amount spendable each year of your retirement. what matters when trying to maximize the amount spendable each year is how large the income streams are, how many income streams are available, what flexibility there is in each income stream and how much risk (and remember that there are multiple risks, eg. market risk, inflation risk, longevity risk to name a few) the retiree is willing to shoulder. the analysis that i provided earlier (that was poo pooed by another poster), increases the amount spendable many years while reducing market and longevity risk (inflation risk arguably stays the same). with those advantages who cares if you get to the "break even" point for SS? the only people i can think of who might are the ones who want to maximize their estate at their death, which is a different goal than the 1 my analysis set out to solve.
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Old 12-14-2012, 09:04 PM   #22
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So if someone has had chronic health issues and/or a family history of dying in their late 60s and early 70s then you think it is still best for them to delay SS until they are 70?
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Old 12-14-2012, 10:58 PM   #23
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So if someone has had chronic health issues and/or a family history of dying in their late 60s and early 70s then you think it is still best for them to delay SS until they are 70?
lets explore that scenario, but first, to clarify, let me ask you some questions. how would you suggest they use their portfolio? specifically, assuming the person is 62 at the time of this decision would you recommend that the retiree use a WR of 10%+ per year since they arent likely to live longer than 10 more years? or maybe more to the point of my question, would you recommend that they spend 1/10th of the portfolio the 1st year, 1/9th of the remaining portfolio the 2nd year, 1/8th of the remaining portfolio the 3rd year and so on so that their portfolio is entirely expended in 10 years? if not what WR would you recommend and why would you not recommend the above?

also, my answer will depend on the size of their portfolio, their spending requirements, and the size of their SS, so i would need to know those values to be able to answer your question.
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Old 12-15-2012, 06:58 AM   #24
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You're funny. It is a simple yes/no question.

I ask you one simple yes/no question and in response you don't answer it and insist that I answer 4 of your questions.
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Old 12-15-2012, 07:05 AM   #25
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It is a simple yes/no question.
reminds me of a former President of Venezuela, famous for answering direct yes / no type questions by saying "neither yes nor no, but just the opposite" (ni si ni no, sino todo lo contrario)
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Old 12-15-2012, 10:35 AM   #26
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Perhaps they are related.
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Old 12-15-2012, 10:48 AM   #27
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You're funny. It is a simple yes/no question.

I ask you one simple yes/no question and in response you don't answer it and insist that I answer 4 of your questions.
You should come back with 16 questions .

I think even I could have come up with an answer to your single and simple question.
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Old 12-15-2012, 11:14 AM   #28
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You should come back with 16 questions .

I think even I could have come up with an answer to your single and simple question.
I thought about that but didn't for two reasons. First, I couldn't think up 16 questions for a simple situation and more importantly, I was afraid I would get a response with 256 questions.
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Old 12-15-2012, 01:20 PM   #29
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you guys are a riot, but in perfect keeping with closed minds. (BTW it is very disappointing that 2 moderators, who are not acting under their official duties as moderators, join in the ridicule.) your reluctance to answer me tells me that you arent all that serious about your question (and your personal attacks are confirmation)

ok, since i am serious, i will make assumptions about your answers and provide to you what you would not provide me; answers.

starting with the last questions 1st, i am going to assume that this retiree's portfolio is sizable enough that said 4% WDR is significant compared to the amount of SS s/he is scheduled to collect at age 62 (i.e. portfolio is greater than 9 times the amount of SS s/he is scheduled to collect in their 70th yr if s/he were to wait till then to start collecting). and i will assume that their expenses would be covered by SS if s/he waited till age 70 to start collecting.

and now for the first question i asked; i think there is no way you would suggest that retiree take WDs from their portfolio the way i described in my last post. further i think that you would recommend something less than the 4% plan (since you are such a believer in FireCalc, not that there is anything wrong with FireCalc). given this "answer" to my 1st question, it is obvious that you are concerned enough about longevity (i.e. living longer than you told me this retiree would) that you wont bet your portfolio on a short life. therefore, i would recommend that this retiree put off taking SS till age 70 and use SS as their longevity insurance, living off their portfolio entirely between the ages of 62 and 70.

now, on the other hand, if you were so absolutely sure that this retiree would be dead in 10 years that you are willing to recommend that s/he use the radical WD plan that i asked you about (again, there is no way i believe you would do that) then i might also (meaning in addition to using said WD plan) recommend s/he take SS at age 62, because doing so would increase their spendable amount even more. but s/he better be absolutely sure s/he dies in 10 yrs.
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Old 12-15-2012, 01:24 PM   #30
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This thread is a wonderful example of why the forum installed "ignore poster" software.
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Old 12-15-2012, 01:31 PM   #31
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jdw_fire: OP here.

It was a simple question within a "never touch the principal" context.

Just wanted to know if the "NTTP" might mitigate the "(almost) always take SS at FRA or beyond" rule.

After the posts/replies, it seems that I have my answer, which is "NO". It's all good.
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