Need 3% of $700K Annually. What AA is best?

[nun]

Do you really care? I didn't do all the calculations, but one simple calculation is $700,000/$18000=38.8 years. Do you really need guaranteed income for longer than that? Seems like even a couple percent would extend that quite a few years (that's the calculation I didn't do - sorry). So you would likely only care if your desire was to have the $700,000 there when you die. If not, put it into something ultra safe and it should last you 40 years.

Exactly....the OP is in a happy place. The could buy a joint lifetime annuity and generate $40k per year for life if guaranteed income was the only criterion. An the should be plenty to cover inflation if they need an inflation adjusted $18k. But the OP has a COLAed pension and SS so why not be a bit more aggressive than the Wellesley and a Conservative Lifestyle fund. My situation is similar as I have a pension to cover most of my expenses and I have 60% in stocks and I'm letting the that drift upwards as I get older.....it actually might now be 65% after the past few months.

 

[rayinpenn]

I've studied the variability of dividend paying funds payout during downturns - not nearly as variable as the market. IDV, DVY etc.

Thats my plan at least.

 

[Cheesehead]

Since I posted last night I revisited one of my favorite retirement blogs, a software engineer who retired early and he explains a lot about different retirement strategies but what worked best in the real world for him:

Income Archives - Can I Retire Yet?

Check him out. I want to keep it simple.

 

[frank2009]

I'm going to suggest something a little different:

How about Vanguard Managed Payout?

-Monthly checks
-simple 1 fund solution
-just a small amount of fixed income
-endowment style investing so it your money should last a good long time
-4% annual withdrawal; live a little
-Vanguard handles all the math

Just a thought...

 

[Cheesehead]

Hi Frank,

I looked into them, seemed like a perfect solution, but all the reviews were bad:

http://www.investmentnews.com/artic...anaged-payout-funds-a-tough-sell-to-investors

Maybe that's why they only have $1.8 bin in assets under management? Also, at 4%, they can dip into one's principal, so I will do more of a bucket strategy and try to use balanced funds which will do the AA rebalancing for me. Thanks

 

[capjak]

Cap, you know I am a preferred honk and have close to half my stash in 2 companies. But I would be too weak kneed to suggest that to someone else. Company concentration and sector concentration would be too much for me despite the company's current financial strength.

Good point some diversification and a strong pension.

 

[nun]

I want to keep it simple.

50% joint SPIA for $20k annual income and 50% Vanguard Total Stock Index.......or Balanced Index, Wellington or Wellesley if you are a little more conservative.


Sent from my iPhone using Early Retirement Forum