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Old 06-22-2015, 08:25 AM   #61
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SWR always struck me primarily as a good guide to arriving at a nest egg $ amount, e.g. when to retire. And 4% was only for 30 years at 95% confidence with a certain AA, each of us must adjust for our own # of years, AA, % confidence plus our own individual (arbitrary sleep at night) safety factor as needed.

It was never intended even by the authors to be a set it and forget it withdrawal method. Adjusting as you go has always been a given despite all the misleading debate to the contrary.
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Old 06-22-2015, 08:43 AM   #62
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Originally Posted by Midpack View Post
SWR always struck me primarily as a good guide to arriving at a nest egg $ amount. And 4% was only for 30 years at 95% confidence with a certain AA, each of us must adjust for our own # of years, AA, % confidence plus our own individual (arbitrary sleep at night) safety factor as needed.

It was never intended even by the authors to be a set it and forget it withdrawal method. Adjusting as you go has always been a given despite all the misleading debate to the contrary.
Agreed. To me it was mainly an indicator of whether you had "enough" to retire, and if not then you had to decide how to reduce annual expenses or work longer.
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Old 06-22-2015, 09:06 AM   #63
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Year 2, Day 1: Withdraw 2.5% of original portfolio, or $25,000.
Remaining portfolio = $450,000.
Patch old underwear and move to a van down by the river.
How about joining a jungle tribe and just wear a loin cloth? No underwear needed.

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3.) Non-discretionary annual expenses should be Less than 2% of portfolio amount (Ideally less than 1%)
I can do 2%, no problem. At 1%, life is not worth living becomes very tedious.

Oh, wait! At 2%, if I can just keep up with inflation, that would last me 50 years. And that is without SS!

Nah! I will just continue to party the way I have been doing. My Moroccan-spiced grilled beef was a hit yesterday. My brother said he could smell it coming to the driveway as I was grilling in the backyard. Life's good. Party on!
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Old 06-22-2015, 09:22 AM   #64
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I can do 2%, no problem. At 1%, life is not worth living becomes very tedious.

Oh, wait! At 2%, if I can just keep up with inflation, that would last me 50 years. And that is without SS!

Nah! I will just continue to party the way I have been doing. My Moroccan-spiced grilled beef was a hit yesterday. My brother said he could smell it coming to the driveway as I was grilling in the backyard. Life's good. Party on!
I forgot to add S.S. and Pensions for the Non-discretionary expenses. I edited my post to add Social Security and Pensions as well to the amount of withdrawal for expenses.
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Old 06-22-2015, 10:48 AM   #65
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Just so no one misunderstands (and I know you know this)--the states don't guaranty any annuities. The insurance companies band together, form voluntary associations, and agree to cover each other if someone has trouble paying claims. Should work fine if it is one poorly-run company that runs aground, maybe not fine if there's a systemic issue and bailing out one company will drag others off the edge of the cliff.
Mostly true. But the associations are NOT free to do as they wish and are not voluntary (except to the extent that a company voluntarily underwrites a policy in a given state). The Life and Health Insurance Guaranty Associations (like the basic Insurance Guaranty Associations for liability and W/Comp.) are established and regulated by state laws--with funding from the insurance companies doing that type of business in the state.

(edited to fix Egregious typo/omission!)
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Old 06-22-2015, 03:07 PM   #66
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Too conservative approach to retirement funding can lead to death before retirement. It's all a trade off.

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Old 06-22-2015, 05:38 PM   #67
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I just don't know how to apply the Pfau article to me, since his asset universe is limited to the U.S. I'm in Vanguard Life Strategy funds, which is the simplest and most diversified proxy I know of for owning the whole world's economy via one fund of index funds at a low coast. If an expert says "stocks will only rise 5%" and they are really only predicting the S&P 500, I can't factor in the comment.


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