Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Otar: Unveiling the Retirement Myth
Old 08-23-2009, 04:48 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 6,033
Otar: Unveiling the Retirement Myth

Some of you don't get over to the bogleheads forum. There is (I think) a very important thread started about Jim C. Otar's new book "Unveiling the Retirement Myth" Bogleheads :: View topic - The Decumulation Phase which includes links to links to download the book in PDF format.

Anyways, the topic of designing a portfolio and exporting some risk to an insurance company is discussed here at EarlyRetirement all the time. You may enjoy reading the boglehead thread and Otar's ideas on how much is enough, CPI-indexed annuities, SWR, fluctuations in portfolio value, etc.

(I expect a full book report from Nords in a day or so. )
__________________

__________________
LOL! 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 08-23-2009, 05:08 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
freebird5825's Avatar
 
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 8,353
I just downloaded it. TY
I hold a fixed annuity, which once upon a time was my TSP account. This was an "only option" situation for my age at FIRE. I'm still happy with the choice and the results.
I will be very interested in seeing what Otar has to say.
__________________

__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
freebird5825 is offline   Reply With Quote
Old 08-23-2009, 05:22 PM   #3
Recycles dryer sheets
 
Join Date: Oct 2008
Posts: 295
Thanks, but my Fixed Annuity is my Bond Portfolio...
and doing very well thank you..

8.2% last yr and already +14% this yr..

;>) Happy Camping!
__________________
Dennis is offline   Reply With Quote
Old 08-23-2009, 05:50 PM   #4
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,320
Quote:
Originally Posted by LOL! View Post
Some of you don't get over to the bogleheads forum. There is (I think) a very important thread started about Jim C. Otar's new book "Unveiling the Retirement Myth" Bogleheads :: View topic - The Decumulation Phase which includes links to links to download the book in PDF format.
(I expect a full book report from Nords in a day or so. )
Hey, it's a weekend, it might take me two days.

I was surprised to see that "Nords" registered at the Bogleheads forum a couple years ago. I just tried logging in and asking for my password but the board doesn't recognize any of the the four e-mail addresses I entered.

I probably typo'ed my e-mail address when I signed up (or perhaps that Nords is not me). If any of you know a moderator over there who can either get me into the account or delete it so that I can start over, I'd appreciate the help.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 08-23-2009, 05:58 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Dec 2007
Posts: 4,737
Its over 500 pages. Going to take me awhile to read it. Im one of those types who has difficulty reading things on a computer
__________________
If you want peace, prepare for war.
Notmuchlonger is offline   Reply With Quote
Old 08-23-2009, 06:55 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 8,539
I just downloaded too, thanks. Decumulation is a topic that is not discussed near enough IMO, compared to the tons of info on accumulation...
__________________
Nobody will look after your money/health/life better than you.

Retired Jun 2011 at age 57
Target AA: 55% equity funds / 40% bond funds / 5% cash
approx 20% SI (secure income, SS only)
Target WR: approx 2.5%
Midpack is offline   Reply With Quote
Old 08-23-2009, 07:29 PM   #7
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,320
OK, a poster has offered his help and I've sent an e-mail to the webmaster.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 08-24-2009, 06:20 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Posts: 7,068
Unfortunately, there are no more free copies available. We will have to rely on the generosity of you fast acting readers to summarize.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 08-24-2009, 06:37 AM   #9
Full time employment: Posting here.
 
Join Date: Mar 2008
Posts: 646
Quote:
Originally Posted by donheff View Post
Unfortunately, there are no more free copies available. We will have to rely on the generosity of you fast acting readers to summarize.
I understand that the book is somewhat expensive.
But you can down load it for, I think $3.99
Steve
__________________
Stevewc is offline   Reply With Quote
Old 08-24-2009, 10:25 AM   #10
Moderator Emeritus
CuppaJoe's Avatar
 
Join Date: Jun 2007
Location: At The Cafe
Posts: 6,867
Quote:
Originally Posted by Notmuchlonger View Post
Its over 500 pages. Going to take me awhile to read it. Im one of those types who has difficulty reading things on a computer
Me too, the glare gets to me very fast. I went over to Amazon and requested that they put it on "their e-book reader."
__________________
FIRE'd for two years.
CuppaJoe is offline   Reply With Quote
Old 08-24-2009, 03:33 PM   #11
Thinks s/he gets paid by the post
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W
Posts: 4,872
Thanks for the heads up. I just asked my library to order it and add it to their collection.
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Old 08-24-2009, 07:50 PM   #12
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,320
Quote:
Originally Posted by donheff View Post
Unfortunately, there are no more free copies available. We will have to rely on the generosity of you fast acting readers to summarize.
The first chapter is an excellent review of the math behind present value <--> future value conversions and their assumptions. For those of us who didn't study this sort of financial analysis from a math text, it's worth the entire book.

Did the author put any limits on e-mailing 6 MB PDFs to discussion-board members? Or posting them to social groups?

Where's my reading glasses for this four-point font? Ah, here we go. Let me manually type an excerpted quote:
Quote:
"No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the written permission of the publisher except in critical articles & reviews."
There'd certainly be a lot of critical reviewing around here...
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 08-24-2009, 08:30 PM   #13
Recycles dryer sheets
 
Join Date: Jan 2008
Posts: 160
Well, it's going to take a lot of reading to understand all this. As far as I've got so far, he seems to be making a case that asset allocation is not the overwhelming determinant of portfolio outcomes that Bogleheads claim it is, but rather how "lucky" you are in the timing of your accumulation and retirement relative to stock market trends is an even more powerful factor. Since you cannot know in advance what way future markets will trend, he suggests alternate ways to construct your portfolio and trigger points to warn you that things are not going according to plan. In some of the early examples, he mentions heeding certain warnings and annuitizing before irreversable damage is done. I'll need to read a lot more to understand if this is what he really means.
__________________
quietman is offline   Reply With Quote
Old 08-24-2009, 08:52 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 6,033
As suggested at Bogleheads, I started reading at chapter 41. This tells one whether you are in the "green" zone which means you don't have to worry about retirement assets and their allocation because anything will work or if you are in the "red" zone where nothing will work short of cutting your expenses or if you are in the "gray" zone where you have some decisions to make which will affect the outcome.

No one should be surprised that the green zone is where the folks with a 3% sustained withdrawal rate live.
__________________
LOL! is offline   Reply With Quote
Old 08-25-2009, 07:52 AM   #15
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 1,850
I've gone through about 200 pages so far. Great information, and his focus on portfolio performance during the distribution phase is really useful. Even if you don't agree with everything he says, its a worthwhile read (so far) and a good reference for an unbeatable $3.99 price!

He addresses the affects of dividends, asset allocation, equity sub-asset classes, rebalancing have on a distribution portfolio. His assessment:
- Asset allocation counts, but not as much as the financial industry says.
- Dividends don't have a cumulative effect (as they do in accumulation portfolios), since they're consumed;
- Diversification between equity sub-asset classes helps or hurts depending on your luck. He doesn't seem to discuss the effect on sequence of returns which he rightfully deems as one of the most important determinants of portfolio survival. In my own experience, this has helped - especially in the 2001-2003 downturn.

For those breezing through, pay attention to his assumptions. He sometimes assumes some rather severe constraints. Eg. on page 159, Examples 16.1
"Note: Equity history is based on S&P500 index, plus 2% dividends, less 2% management fees. ..."
__________________
walkinwood is offline   Reply With Quote
Old 08-25-2009, 08:04 AM   #16
Thinks s/he gets paid by the post
 
Join Date: Jun 2006
Posts: 1,502
Quote:
Originally Posted by walkinwood View Post
For those breezing through, pay attention to his assumptions. He sometimes assumes some rather severe constraints. Eg. on page 159, Examples 16.1
"Note: Equity history is based on S&P500 index, plus 2% dividends, less 2% management fees. ..."
Holy cow, that is rather severe.
It does sound like an interesting set of ideas. But if many of his assumptions are like this, there may be simpler methods. Such as not paying 2% management fees
__________________
"We do not inherit the earth from our ancestors, we borrow it from our children.
(Ancient Indian Proverb)"
Zathras is offline   Reply With Quote
Old 08-25-2009, 08:09 AM   #17
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Location: Los Angeles area
Posts: 1,330
I read it. It seems like a reasonable explanation of the retirement process. My only disagreement is with the heavy use of annuities in the distribution phase.
__________________
learn, work, save, invest, fire
CyclingInvestor is offline   Reply With Quote
Old 08-25-2009, 08:44 AM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 6,033
Don't forget that Otar is Canadian and that Canadians enjoy it when they can get their MERs in the 2% range.
__________________
LOL! is offline   Reply With Quote
Old 08-25-2009, 09:09 AM   #19
Thinks s/he gets paid by the post
 
Join Date: Jun 2006
Posts: 1,502
Aha, excellent point.
Is this less applicable then to areas other than Canada?
I may have to pick up a copy somewhere
__________________
"We do not inherit the earth from our ancestors, we borrow it from our children.
(Ancient Indian Proverb)"
Zathras is offline   Reply With Quote
Old 08-25-2009, 03:52 PM   #20
Thinks s/he gets paid by the post
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 4,537
Quote:
Originally Posted by LOL! View Post
No one should be surprised that the green zone is where the folks with a 3% sustained withdrawal rate live.
That's all I need to know.
__________________

__________________
Gone4Good 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
Organic Honey is a Myth Trek Other topics 19 05-09-2009 09:48 PM
Potus Budget Plan Unveiling on 2/23 crazy connie FIRE and Money 30 02-22-2009 02:21 PM
Dividends! Myth? TBPu FIRE and Money 71 01-14-2008 04:44 PM
Financial Myth (i stole this from another financial forum). please, don't sue me. Enuff2Eat FIRE and Money 20 08-19-2007 03:26 PM
The Cat Food Myth LOL! Other topics 15 08-14-2006 05:35 PM

 

 
All times are GMT -6. The time now is 04:09 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2014, vBulletin Solutions, Inc.

Early Retirement News right to your Email!

Stay up-to-date with all the latest news to your inbox!

unsusbcribe at anytime with one click

Close [X]