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View Poll Results: Excluding Soc Sec, what is/will be your PRIMARY retirement income approach?
SWR/Constant percentage approach 54 35.53%
Supplementing with part-time/sporadic work income as needed 4 2.63%
Norwegian widow, spend dividends & gains, leave principal untouched 14 9.21%
Time based segments, Buckets of Money, Grangaard, etc. 8 5.26%
Essential vs discretionary income, safe investments for essential 4 2.63%
Pension, annuity etc. 63 41.45%
Passive income, from spouse, family, business ownership, etc. 5 3.29%
Voters: 152. You may not vote on this poll

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Poll: Primary Retirement Income Source
Old 12-05-2010, 01:55 PM   #1
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Poll: Primary Retirement Income Source

Comments/caveats:
  1. Soc Sec is not an option because it's almost universal, and a part of most everyone's retirement income. If Soc Sec is your primary source of retirement income, please choose the Pension/Annuity option.
  2. Flexibility seems to be an essential ingredient to any successful retirement income plan, that's understood and assumed for all poll answers (including SWR).
  3. Using various sources is also probably very common, that's understood and assumed with all poll answers as well.
  4. I have deliberately left off OTHER as an option, though there may be others.
The question is what is/will be your PRIMARY source of retirement income as you know it today?

Let's see how long it takes someone to point out an option or caveat I've missed...
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Old 12-05-2010, 02:41 PM   #2
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Thanks for your pre-poll in the other thread. I took your suggestion and voted that my primary income source was the Norwegian widow variety.
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Old 12-05-2010, 02:53 PM   #3
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I don't see the poll?
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Old 12-05-2010, 03:00 PM   #4
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Quote:
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I don't see the poll?
That's grammatically interesting. Are you asking us whether you see the poll? Or are you saying you don't see the poll and asking: "What's going on here?"
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Old 12-05-2010, 03:41 PM   #5
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Found it. I believe you left out one very important source- spend dividends and real interest, but not gains.

In a real sense, you cannot spend gains and keep principle intact. One can only imagine doing this he confuses real principle with nominal value of that principle.

For example, how could you spend income and gains without winding up with fewer shares? If you have fewer shares, you have a smaller part of an earning enterprise -no matter at what price that smaller part is currently priced.

Ha
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Old 12-05-2010, 03:46 PM   #6
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I had to read the Grangaard strategy paper to answer the poll, and in fact, the paper puts into words the approach that I have been thinking of taking, more or less. However, none of these approaches discusses the sequence of tax sheltered and non tax sheltered portfolios.

Another problem I had was that the poll mixes income sources and strategies.
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Old 12-05-2010, 03:47 PM   #7
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Quote:
Originally Posted by haha View Post
... how could you spend income and gains without winding up with fewer shares?
Assuming that one is lucky enough to "buy low sell high rinse repeat", he would have more shares.

Oops. Make it "rebalancing" to be PC here. Yes, would rebalancing not get one more shares over time?
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Old 12-05-2010, 03:50 PM   #8
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Quote:
Originally Posted by haha View Post
Found it. I believe you left out one very important source- spend dividends and real interest, but not gains.

In a real sense, you cannot spend gains and keep principle intact. One can only imagine doing this he confuses real principle with nominal value of that principle.

For example, how could you spend income and gains without winding up with fewer shares? If you have fewer shares, you have a smaller part of an earning enterprise -no matter at what price that smaller part is currently priced.

Ha
Yes, I agree. I am not selling shares to live on, but only to rebalance as needed. My withdrawal from my taxable account each January is based only on dividends earned in the previous year plus a tiny bit of money market interest, not on principle or capital gains.
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Old 12-05-2010, 03:53 PM   #9
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Pension, annuity etc.

Our primary source will be a non-COLA pension with 401k, Roths and taxable funds used in a sort of bucket approach to supplement pension and as inflation protection.

SS will be taken at whatever point it is most advantageous regarding future rules.
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Old 12-05-2010, 04:00 PM   #10
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Assuming that one is lucky enough to "buy low sell high rinse repeat", he would have more shares.

Oops. Make it "rebalancing" to be PC here. Yes, would rebalancing not get one more shares over time?
Not if you spend the gain. You cannot assume that a stock will always be offered at the same per share price that you once bought it at. 1000 shares is bought at $20,000 and sold at $40,000 We spend the $20,000- now our dividend income has been cut in half. Maybe the good fairy will make the shares go back to $20, so we can again buy 1000 shares with our remaining $20,000-less friction of course. And for you, she might just do this.
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Old 12-05-2010, 04:30 PM   #11
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By "SWR/Constant percentage approach" do you mean x% corrected for inflation annually, or do you mean x% of portfolio value each year, disregarding inflation?
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Old 12-05-2010, 04:39 PM   #12
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Gosh I am a Norwegian Widow! I wonder what DW will think of that?
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Old 12-05-2010, 04:39 PM   #13
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And for you, she might just do this.
The good fairy offers the same good deal to all of us. However, not all of us take up on the offer for one reason or another. I suspect the most frequent reason is that we tend to be suspicious that she might be foolin'.

Anyway, if one sells all of his cap gains to live on, then you are right that one cannot count on the price dropping in half again for repurchasing. But, to sell just a few percent, then would that not be more feasible? And perhaps sustainable if the market keeps going up and down like yo yo?

It's just in theory, of course. Due to my part-time income, I have not had to touch my savings, except for 2008, hence I can still "talk big". But at this point, I can live on a range from 2% to 4%, so can have a bit of a leeway.
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Old 12-05-2010, 04:39 PM   #14
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The Norwegian widow is the closest for me but not quite right - I'll live off dividends and rents, but hope not to spend any other gains so that the real value of my assets can be maintained. A cash bucket will provide a buffer should I have a lean year or two or three.
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Old 12-05-2010, 04:43 PM   #15
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Gosh I am a Norwegian Widow! I wonder what DW will think of that?
She'll probably love it, given that most women seem to outlive their husbands. She'll have more money after you are gone (should you predecease her), than if you took a less conservative approach.
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Old 12-05-2010, 05:13 PM   #16
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Pension, annuity etc.

Current:
CSRS survivor pension
TSP 401(k) converted into a fixed annuity
Future :
my own deferred FERS pension in 4 years
income generating national muni bond fund (instead of cash, CDs, money market)
40/60 AA mutual fund modest retirement portfolio
SS in some form (from my own w*rk record)
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Old 12-05-2010, 05:20 PM   #17
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I voted "Pension, Annuity etc." after some thought. I don't expect that those will provide more than 40% of our first ten years worth of retirement spending. However, my w*rk-related pension, with its associated medical coverage, is the basis of the "never having to eat dog food" part of the plan.
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Old 12-05-2010, 05:27 PM   #18
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Mostly Norvegian Widowish (spend dividends and interests but reinvest gains) but I also make sure that essential expenses are covered by income from relatively reliable sources.
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Old 12-05-2010, 06:47 PM   #19
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Which option covers two swr's - higher before ss and lower after?
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Old 12-05-2010, 07:10 PM   #20
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Pension/annuity is my main source of income.


Quote:
Originally Posted by haha View Post
For example, how could you spend income and gains without winding up with fewer shares? If you have fewer shares, you have a smaller part of an earning enterprise -no matter at what price that smaller part is currently priced.

Ha
I agree if you are purely talking about selling shares of stock or of a Mutual Fund.

For my Wellesley account I have dividends going to MM for income, but captital gains re-invested, which results in more shares each time there is a distribution. (Usually in December each year there is a capital gain distribution).

However, if I chose to have the cap gains also go towards my income I would still maintain the same number of shares in my Wellesley account.
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