Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 03-14-2012, 11:25 AM   #61
Recycles dryer sheets
 
Join Date: Jan 2010
Posts: 226
Quote:
Originally Posted by Ed_The_Gypsy View Post
The "6%" did not just fall out of the sky.

At one time 6% was widely touted as a sound SWR, as many here will recall.

I suspect Mr. O. wanted to kill that idea up front if a reader was still entertaining 6%.
Before I read URM, I had no clue what was considered "safe" or sustainable anymore. Otar's information about the luck factor in light of what had happened to the market in 2008 was very telling. We've decided on a ISWR of less than 2.5% and have a little extra on the side that we can spend throwing caution to the wind.
__________________

__________________
misty57 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!

Old 03-14-2012, 11:05 PM   #62
Thinks s/he gets paid by the post
Major Tom's Avatar
 
Join Date: Nov 2009
Location: SF East Bay
Posts: 3,130
Quote:
Originally Posted by Midpack View Post
For 30 years, 6% would have been safe 48.6% of the time without Soc Sec, and 82.9% of the time with $16K/yr in Soc Sec. No recommendation, just what FIRECALC returns...
Midpack, you've just given me a whole new way of looking at WR's.

Firecalc tells me that with my AA, a WR of just over 7% will give me a success rate of 12.5%!

Do I feel lucky? Well, do ya, punk?
__________________

__________________
ER, for all intents and purposes. Part-time income <5% of annual expenditure.
Major Tom is offline   Reply With Quote
Old 03-14-2012, 11:13 PM   #63
Thinks s/he gets paid by the post
Finance Dave's Avatar
 
Join Date: Mar 2007
Posts: 1,046
Quote:
Originally Posted by KB View Post
Thank link appears to be dead for me, are you folks still seeing it?
__________________
"Live every day as if it were your last, and one day you'll be right" - unknown
Finance Dave is offline   Reply With Quote
Old 03-15-2012, 12:08 AM   #64
Thinks s/he gets paid by the post
Major Tom's Avatar
 
Join Date: Nov 2009
Location: SF East Bay
Posts: 3,130
Quote:
Originally Posted by Finance Dave View Post
Thank link appears to be dead for me, are you folks still seeing it?
Post 42 in this thread will tell you what happened to it.
__________________
ER, for all intents and purposes. Part-time income <5% of annual expenditure.
Major Tom is offline   Reply With Quote
Old 03-15-2012, 07:27 AM   #65
Thinks s/he gets paid by the post
seraphim's Avatar
 
Join Date: Mar 2012
Posts: 1,492
Quote:
Doesn't he even mention Fire Calc?
If he mentioned FireClac he couldn't sell his $99 spreadsheet.

Fore those needed free and compatible Microsoft Office Suite, use OpenOffice.org: it's a open source clone developed for Linux and ported to windows, and the authors consistently update and there's online support for users (third party).
__________________
"Growing old is no excuse for growing up."
seraphim is offline   Reply With Quote
Old 03-15-2012, 08:56 AM   #66
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,980
Quote:
Originally Posted by Major Tom View Post
Midpack, you've just given me a whole new way of looking at WR's.

Firecalc tells me that with my AA, a WR of just over 7% will give me a success rate of 12.5%!

Do I feel lucky? Well, do ya, punk?
Nope...
Attached Images
File Type: jpg Dirty-Harry.jpg (84.2 KB, 154 views)
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 03-15-2012, 01:17 PM   #67
Thinks s/he gets paid by the post
Finance Dave's Avatar
 
Join Date: Mar 2007
Posts: 1,046
Quote:
Originally Posted by REattempt View Post
For those looking for the free version of the book as listed in the second link in this thread...Jim asked them to remove the link and the book from their site.

They removed the link and the file.
Ah, thanks. Sometimes I don't read all the pages of posts LOL.
__________________
"Live every day as if it were your last, and one day you'll be right" - unknown
Finance Dave is offline   Reply With Quote
Old 03-18-2012, 04:30 PM   #68
Recycles dryer sheets
 
Join Date: Oct 2002
Posts: 80
Just finished Otar's book. A good read and worth the $5.99, but a couple of comments.

First off I agree that his frequent use of 6 (sometimes 5%) WR is out of line for most, if not all members of this forum.

For fixed income he mosty uses the 6mo CD rate +1%. That seems a little low for the entire fix income portion of a portfolio.

And, he rather consistently uses a 2% managment fee. Wow, who's paying that? And what would his SWRs look like with a more modest fee structure?

Finally, he really seems to like annuities. Even for the senarios for the guy who is in Otar's "green" zone, his senarios mostly involve using annuities.

Just my 2 cents worth.
__________________
moguls is offline   Reply With Quote
Old 03-18-2012, 04:34 PM   #69
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,627
Otar is Canadian. Many Canadian's pay MER's in the 2%. They do not have enlightened low-expense-ratio providers of financial services. Europe may be even worse.

SPIA's are a great way to shift longevity risk to an insurance company. Once again, Otar is Canadian. He doesn't really address the fact that in the US, Social Security is essentially an inflation-adjusted SPIA that helps insure against longevity risk.
__________________
LOL! is offline   Reply With Quote
Old 03-19-2012, 10:39 AM   #70
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,980
Quote:
Originally Posted by moguls View Post
Finally, he really seems to like annuities. Even for the senarios for the guy who is in Otar's "green" zone, his senarios mostly involve using annuities.
He certainly talks about annuities a lot, but I didn't read the "green zone" the way you did. While I hope to avoid buying an annuity, if I find myself in the gray or especially red zone, I think an annuity has to be a very serious consideration. YMMV
Attached Images
File Type: gif Picture1.gif (66.4 KB, 4 views)
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 03-19-2012, 11:24 AM   #71
Dryer sheet wannabe
 
Join Date: Jun 2002
Posts: 21
I agree with Midpack. See the chart on page 470 of the book. Also @ page 471:

Conclusion:
If you are in the green zone, then any reasonable income allocation strategy works. If you want additional income security, you can build ladders for annuities, VA–GMWB’s and VA–GMIB’s. The rungs of the ladders can be one year apart or several years apart. You have the freedom to choose any strategy that makes sense.
You do not need any miracles and you do not need to take unusual risks. Ordinary market index within a balanced portfolio provides a lifelong income, and then some. If you do not like the risks of the equity markets at all and you don’t like annuities, in many cases a bond portfolio will give you all you need, provided that your are in the green zone and don’t live beyond age 94.

Happy that I am in the Green zone!!! I have learned quite a lot from this book and only wish Mr. Otar would publish more of his knowledge as time changes some of his findings and viewpoints.

__________________
stevelb is offline   Reply With Quote
Old 07-13-2012, 09:18 PM   #72
Confused about dryer sheets
 
Join Date: Feb 2006
Location: Midwest
Posts: 7
I missed this thread but found Jim's book through LOL!'s post #18 in this thread:
modeling options for early retirement

I shelled out the $5.99 and found it well worth it. The discussion about the equity to bonds ratio (its not critical) was eye opening and worth the cost of admission just for that section. I'm not a big fan of math and I admit there were many times I glossed over sections, but the way it was written really did seem to allow some skimming while still getting the general idea.

I read it on a Nook and much of the formatting of charts were lost so if your local library has it, you may prefer the hard copy format. The charts do look fine when I open the pdf on my computer though.
__________________

__________________
Fttaw 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
Great book title REWahoo Other topics 11 02-02-2012 04:46 AM
Currently free retirement e-book Focus Other topics 5 01-12-2012 08:15 AM
If you could recommend 1 book for this situation... PSUgrad2 FIRE and Money 12 12-31-2011 08:35 PM
The Madoff book & interviews... Bram Other topics 20 11-01-2011 01:04 PM

 

 
All times are GMT -6. The time now is 01:54 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.