Join Early Retirement Today
View Poll Results: Which of the statements below best describes your RE portfolio goals?
Capital preservation is my primary goal. Income from dividend and interest income is my secondary goal. (This implies that the portfolio is sufficiently large that withdrawals will not exceed yield, or that there is another source of income.) 16 17.39%
Capital preservation is my primary goal for the first few years. After that, my primary goal will change to income generation. (This retiree either has a cash "bucket" or part time w*rk) 17 18.48%
Income generation is my primary goal from Day 1. My capital may be partly depleted over time, but I hope to have some residual capital to leave as a legacy. 21 22.83%
Income generation is my primary goal from Day 1. My capital may be partly depleted over time, but I want to keep enough to purchase an annuity at a later date. 1 1.09%
Income generation is my primary goal. I am also hoping for some capital appreciation for the first X years. (This implies that expected portfolio yield exceeds income requirements early in retirement; this portfolio is probably large.) 19 20.65%
I have retirement income sufficient to meet my needs independent from my portfolio, which I can spend, or not, at my discretion. (This retiree has a COLA'd pension and healthcare is covered). 18 19.57%
Voters: 92. You may not vote on this poll

Reply
 
Thread Tools Search this Thread Display Modes
Retirement Portfolio Goals Poll
Old 04-18-2010, 02:52 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,018
Retirement Portfolio Goals Poll

Here is the poll Midpack was considering, with my edits.

The desired balance between capital preservation, income and growth is key to finding the right asset allocation.
__________________

__________________
Meadbh 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 04-18-2010, 03:55 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
OK, I want an "Other" choice now!

I'm retired, DW works for now but we supplement her income with our portfolio. I don't invest for dividends and interest, nor do they provide enough income for us, I mostly sell equity shares to meet my income needs (just last week even!). At the same time, our portfolio value is still growing well above inflation now and should continue to grow above inflation after DW retires. Not preservation in the sense of spending only dividends and interest, nor in terms of a constant portfolio in dollars. But I'm definitely not spending it down.

Number 1 is the best fit, but not a good one.
__________________

__________________
Animorph is offline   Reply With Quote
Old 04-18-2010, 04:48 PM   #3
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
The best answer for me is #2. Preservation of capital is crucial during the first few years (not sure yet whether it's going to be by living on a fixed % of portfolio, or having a significant cash bucket, or pulling a Norwegian Widow move and using dividend income as a backstop) with more focus on income starting in our 60s (no need to leave a legacy).
__________________
FIREd is online now   Reply With Quote
Old 04-18-2010, 05:01 PM   #4
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,887
I voted for income generation and hoping for some capital appreciation.

I don't plan to spend more than my dividends, so hopefully there will be some capital appreciation. However, suppose that some day I become a Big Spender and want to spend more than my dividends, up to my chosen SWR? That would be perfectly OK as long as that is what I want to do. Right now, I just think "Why?"
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 04-18-2010, 05:20 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Amethyst's Avatar
 
Join Date: Dec 2008
Posts: 5,887
I'm working, husband is retired, I expect a (somewhat) COLA'd* pension. Our pensions will be enough to cover our expenses, if life goes on as it has; but we know perfectly well that it won't. Therefore, I want enough extra to cover LTC for husband and eventually, for me. Plus hire other people to do stuff that we now do for ourselves. So, I need an option for "Has pension; also needs to preserve capital for first part of retirement; needs to generate income/have enough capital to spend down for LTC part of retirement."
A.
*As I've posted many times before, the COLA is pegged to the CPI, a woefully inadequate inflation measure. Still, it's better than no COLA at all.
__________________
If you understood everything I say, you'd be me ~ Miles Davis
'There is only one success to be able to spend your life in your own way. Christopher Morley.
Amethyst is offline   Reply With Quote
Old 04-18-2010, 05:38 PM   #6
Full time employment: Posting here.
 
Join Date: Apr 2009
Posts: 731
Quote:
OK, I want an "Other" choice now!

I went with this one:

Income generation is my primary goal. I am also hoping for some capital appreciation for the first X years. (This implies that expected portfolio yield exceeds income requirements early in retirement; this portfolio is probably large.)
My portfolio yield is mixed - the "yield" will hopefully be sufficient. I have some investments in dividend-yielding stocks and bonds, some in stocks or mutual funds with capital appreciation possibilities. It's not a huge amount of money which is why I'm having trouble with "this portfolio is probably large".

I have no pension to carry me through - careful investing and virtually no debt is my normal lifestyle.
__________________
Retired July 2, 2010 at 62. My only regret is that I couldn't do it sooner.
thinker25 is offline   Reply With Quote
Old 04-18-2010, 05:49 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,471
OTHER! - Total Return approach with 3.5% fixed SWR

Well - none of these meets the classic Trinity Study type SWR. That does not worry about "Capital Preservation" nor "Income Generation" (if by income generation you mean interest and dividend income).

By definition, the Trinity Study model does NOT seek to preserve capital as you can go to 0, nor does it rely on interest or dividend income by themselves.

Those of us operating on the Trinity Study model - whether using the initial SWR inflation adjusted OR the fixed SWR % recalculated each year - do not fit in the above poll.

Audrey
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Old 04-18-2010, 05:49 PM   #8
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,617
Quote:
Originally Posted by Amethyst View Post
I'm working, husband is retired, I expect a (somewhat) COLA'd* pension. Our pensions will be enough to cover our expenses, if life goes on as it has; but we know perfectly well that it won't. Therefore, I want enough extra to cover LTC for husband and eventually, for me. Plus hire other people to do stuff that we now do for ourselves. So, I need an option for "Has pension; also needs to preserve capital for first part of retirement; needs to generate income/have enough capital to spend down for LTC part of retirement."
A.
*As I've posted many times before, the COLA is pegged to the CPI, a woefully inadequate inflation measure. Still, it's better than no COLA at all.
Or, in other words, "You want to work how long?"
__________________
*
*

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 04-18-2010, 05:59 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,018
I didn't include "other" because of the original discussion. If one of the Mods would like to do so now, please go ahead. It's not like we're doing a scientific study or anything!

With 30 votes, nobody has voted for income all the way.
__________________
Meadbh is offline   Reply With Quote
Old 04-18-2010, 06:06 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,471
I'm not really asking for "OTHER" - I'm pointing out that the Trinity Study type SWR model is missing from the poll, and IMO that is a pretty huge omission.

Audrey
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Old 04-18-2010, 06:10 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,018
I am not familiar with the Trinity SWR model. But I'm happy to learn if you would like to explain it, Audrey.
__________________
Meadbh is offline   Reply With Quote
Old 04-18-2010, 06:19 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,471
When on this forum we talk about SWR (Safe Withdrawal Rates), and FIRECalc and portfolio survival based on historical data - that is all based on the Trinity Study model and variations to it.

Audrey
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Old 04-18-2010, 06:25 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,018
Thanks Audrey. I still don't understand how the concept of SWR is in conflict with the concepts in the poll. Maybe I'm stupid or something....
__________________
Meadbh is offline   Reply With Quote
Old 04-18-2010, 06:33 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Quote:
Originally Posted by Meadbh View Post
Thanks Audrey. I still don't understand how the concept of SWR is in conflict with the concepts in the poll. Maybe I'm stupid or something....
If I may . . .
Say a retiree has constructed a diversified portfolio that meets his/her risk tolerance. The retiree plans to withdraw 3.5% of the ending balance of the portfolio each year. Which poll answer would this retiree pick? Or, say the retiree plans to take 3.5% of the initial portfolio and increase this amount for inflation every year--which poll answer should this person choose?
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Old 04-18-2010, 06:33 PM   #15
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: 9,017
#6 for me, but not on a scale large enough that I can live off a modest pension and annuity forever. Health bennies are covered and self paid.
My medium size portfolio, still under construction, is the protective cushion if SS does not turn out to be (in 11 years) what my statements say it will be. The portfolio will be just about the right size at about the same time I have to make the "take it or delay it" decision about SS at age 62.
__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
freebird5825 is offline   Reply With Quote
Old 04-18-2010, 06:36 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,471
Quote:
Originally Posted by Meadbh View Post
Thanks Audrey. I still don't understand how the concept of SWR is in conflict with the concepts in the poll. Maybe I'm stupid or something....
The SWR method does not rely on income from a portfolio. It is based on the total return (both income AND cap gains together) for each given AA over several decades based on historical data.

And the SWR method does not seek to preserve principal, but instead expects to spend principal down in some cases, even if temporarily. Instead you pick an SWR and AA that has a high chance of the portfolio not going to 0 before a certain number of decades has passed.

That is why I am saying it is not included in the above poll. There is no capital preservation. There is no investment income goal. It's all based on an SWR and a time period.

Could be described as "My goal is portfolio survival for X decades based on a Y SWR".

Note that this also means - "I don't care about capital preservation, nor do I care what income is generated by the portfolio."

Audrey
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Old 04-18-2010, 06:45 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,018
Thanks for the explanation Audrey. In other words, people who focus only on SWR alone will not care whether the SWR comes from dividends, interest or capital. Now I get it.

I guess I am not a "pure" SWR fan. I will be looking at the absolute numbers and the underlying portfolio structure.
__________________
Meadbh is offline   Reply With Quote
Old 04-18-2010, 07:33 PM   #18
Thinks s/he gets paid by the post
Coach's Avatar
 
Join Date: Nov 2005
Location: Colorado, USA
Posts: 1,127
I'm with audreyh1.

Coach
__________________
"Comprehensive health insurance is an idea whose time has come in America." President Richard M. Nixon, February 6, 1974
Coach is offline   Reply With Quote
Old 04-18-2010, 08:18 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Sep 2009
Location: Hong Kong
Posts: 1,574
Plan A is to maintain the real value of my portfolio indefinitely and live of less than 100% of the income.

Number 1 is the best fit.
__________________
Budgeting is a skill practised by people who are bad at politics.
traineeinvestor is offline   Reply With Quote
Old 04-18-2010, 08:35 PM   #20
Thinks s/he gets paid by the post
 
Join Date: Nov 2009
Posts: 3,867
I chose #5. I expect to run surpluses (dividends > expenses) in the next 10 years or so (on my non-retirement investments) although I will probably begin to run deficits for a few years until I can tap into my three "reinforcements" which are (a) IRA, (b) frozen pension, and (c) Social Security (if it is still there).

I am not assuming any long-term reduction in my expenses due to HI reform, though.
__________________

__________________
scrabbler1 is online now   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
Is there a poll re: RE portfolio amounts? Chaos Abounds FIRE and Money 36 08-31-2009 10:42 AM
Poll: Retirement Portfolio Management chinaco FIRE and Money 11 03-31-2007 05:51 PM
how often do you check your portfolio balance poll wstu32 FIRE and Money 28 01-14-2007 01:20 AM
Poll: How often do you rebalance your portfolio? Lusitan FIRE and Money 7 05-06-2006 12:51 PM
post-retirement goals wabmester Life after FIRE 0 12-10-2003 11:34 AM

 

 
All times are GMT -6. The time now is 09:08 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.