Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 11-16-2016, 06:51 PM   #101
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 22,097
I have a wide range of outcome in my mind, depending on how the market works out.

Best case: I maintain the two houses I have now, and the motorhome. Each year, I do a 2-month long RV trek, take a 1-month European trip, and a 1-week cruise. My stash grows so much, but I do not know what to do with it despite giving some to charities, so will die rich. Upon my death or DW's, whatever occurs later, my two children immediately enter ER with the money left behind.

Worst case: I lose both houses, and go live in the 25' RV, parked on New Mexico state land for a couple of bucks a day.

The future has to fall somewhere within those extremes. And if I am OK with those two extremes, it should be OK with whatever in between.

Of course, I prefer it to be one case than the other. But that shows the flexibility that I have. Have not discussed it with my wife. No point in worrying her needlessly.
__________________

__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound 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 11-16-2016, 06:54 PM   #102
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 41,027
Quote:
Originally Posted by NW-Bound View Post
It works out OK, so that's a job well done for keeping the surplus invested instead of keeping it in cash.

Now, had the market tanked, then what would happen? You would not even think or look for the dream house, and would have a different set of questions to ask yourself, and not the above question.

What I am saying is if I go back and ask the question of "what if", I would never stop, and would never really know anyway. It's more constructive to take it from here, and see what to do at this point.
Thanks! That makes it so clear. I don't know why I didn't see that. I guess I was lucky that this big expense was actually discretionary, a want rather than a need.
__________________

__________________
100% retired since 2009 and never plan to work for anybody ever again, paid or not. Retirement funded by Social Security, mini-pension, and investments (AA 45:55, mostly Vanguard). Debt free with no mortgage and over-the-moon happy to be retired.
W2R is offline   Reply With Quote
Old 11-16-2016, 07:16 PM   #103
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: 19,827
Quote:
Originally Posted by W2R View Post
If I had withdrawn 4% every year and then saved the excess money in a savings account with 0% interest from 2010-2015, that would more than cover the net purchase price of the house plus moving, renovations, and all other house transaction/move/fixup related expenses that are included in the "2015 HOUSE! " entry in the table.

But is that valid? I wonder. What about the value of money in the bank, versus money in my portfolio? In reality the house money was invested for all those years. Luckily my portfolio has grown steadily so I am pretty sure I am OK. But really, I think this could be a huge issue in a declining market. I probably should have segregated that excess money during those years, by moving it from Vanguard to, say, Fido or Schwab and investing it there. But until I found the right dream house, I didn't know for sure that I definitely would be buying a house.
It's just a different way of handling things. You happened to be lucky and the market went up during those years (actually, not a bad bet after a terrible time like 2008-2009). So you realized you could lower your portfolio, accept lower future income, and pay for your dream house. Folks will occasionally do this too - it's perfectly valid as long as you can accept the lower future income.

BTW - excess money doesn't need to return 0% interest unless you are really not paying attention. You can get at least 1%, and probably a little more.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 11-17-2016, 01:31 AM   #104
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 41,027
Quote:
Originally Posted by audreyh1 View Post
It's just a different way of handling things. You happened to be lucky and the market went up during those years (actually, not a bad bet after a terrible time like 2008-2009). So you realized you could lower your portfolio, accept lower future income, and pay for your dream house. Folks will occasionally do this too - it's perfectly valid as long as you can accept the lower future income.

BTW - excess money doesn't need to return 0% interest unless you are really not paying attention. You can get at least 1%, and probably a little more.
Very wise comments, as always. Thanks. Honestly, to me it has seemed very confusing for some reason. Despite that I was determined to buy the house. The lower future income won't be a problem and hopefully I won't be spending like that again for quite a few years.
__________________
100% retired since 2009 and never plan to work for anybody ever again, paid or not. Retirement funded by Social Security, mini-pension, and investments (AA 45:55, mostly Vanguard). Debt free with no mortgage and over-the-moon happy to be retired.
W2R is offline   Reply With Quote
Old 11-17-2016, 07:22 AM   #105
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,991
I don't understand why people have problems with audrey1's approach. I have been doing something similar as have other posters. A few of us describe it as generating a "mad money" pool for extravagances or for use during hard times. The only difference I see is that audrey apparentlt literally invests it in a separate real account. I invest keep it in my regular accounts but track it as a pseudo account. Let me explain.

I have been using the Guyton approach (and tracking a few others to see roughly how they would have gone). I initially set the SWR at 3.8 and did a reset and dropped it to 3.0 when I sold my weekend house. I have consistently under-spent my withdrawal amount by between 10-30%. At year end I subtract the unspent amount from the total portfolio on my spreadsheet and add it to the "mad money cell (which I have just adjusted up or down based on the past year's performance). I have another cell labeled "SWR portfolio" tracking the remainder of the portfolio. In essence that cell tracks the portfolio I would have had if I spent my entire withdrawal. I use that cell to calculate calculate the appropriate SWR amount for the coming year applying Guyton rules.

I keep the mad money in a pseudo account because I find it easier to just let it ride in the overall portfolio AA. I view this pile of funds as an "account" to draw on if I want to splurge on something way above my budgeted SWR or to supplement the SWR in bad years if Guyton pulls me down to a level I am uncomfortable with. In the actual event of a major downturn I may very well chicken out and leave the mad money alone. I may also recalculate everything (ratchet up or down) a decade or so further down the line and (hopefully) start splurging on myself and/or gifting the kids/charities.

On the ratcheting question based on a traditional SWR I would simply express caution. A couple of posters correctly (I believe) noted that consistently ratcheting up on peaks slowly but surely eliminates the more optimistic FC scenarios from your actual situation with respect to history. That helps ensure that you won't die with a big pile but also puts you in more risky territory if you live a long time or if historical precedents don't pan out. Many of us have dropped our our SWR amount below 4% based on either the point in the apparent cycle we started or based on worries that the fundamentals have changed. I would be loath to ratchet up soon if I started at a high SWR to start with.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 11-17-2016, 08:11 AM   #106
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 22,097
Quote:
Originally Posted by donheff View Post
I don't understand why people have problems with audrey1's approach...
No, not problems. There are different ways to save the unspent surplus for rainy days, and we were trying to see the pro and con of each.

About drawing 4% of current portfolio value and not spend it all during market good years to save to splurge later, what about going ahead and spend it, but on non-recurring expenses?

It is not bad either to rebalance some of those high P/E stocks into a new roof, a replacement for a clunker, a bucket list item, etc..., with an understanding that one should not develop a habit to spend the same in lean years.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 11-17-2016, 08:19 AM   #107
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,991
Quote:
Originally Posted by NW-Bound View Post

About drawing 4% of current portfolio value and not spend it all during market good years to save to splurge later, what about going ahead and spend it, but on non-recurring expenses?
My pseudo account can be addressed toward that. So far I have been lucky enough to be able to cover most non-recurring expenses out of the SWR amount and still have some left over. But, I may remodel the bathroom in a few years. If I decided that was also when I was ready to buy a new car and couldn't get a 0% or other super low interest rate, I would deduct the expenses that exceeded SWR from my mad money fund. Similarly, if some unexpected large expense comes up I would not automatically cancel one of my European bike trips to accommodate the expense, I would tap mad money.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 11-17-2016, 08:36 AM   #108
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 22,097
I do not keep any spare money separate. Every account is included in Quicken, and added to its bottom line. In order to splurge or not, I look up expenses in past years and mentally see where I am.

I just started tracking my expenses just recently, so only have the past 6 years to look at. The highest year was 50% more than the frugal year. Overall, they are about where I want to spend. So, no surplus to speak of. There should be some in the coming years. No more wedding, big home projects, major illness, etc... On the other hand, the healthcare cost increase may just eat all that up.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 11-17-2016, 08:53 AM   #109
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 22,097
Two years ago, I sat down to figure out how much SS could help, once and for all. So, I ran SS-provided calculator, and entered the numbers into FIRECalc. Assuming no benefit reduction when I get there, when SS is included FIRECalc says I have been spending only 73% of what I could.

And then just for grin, I selected the Bernicke's spending model. FIRECalc says I can go ahead and spend double what I do now! All the above is for a 30-year run, and I don't think I will live that long. People drop like flies in their 80s. So, I could spend even more. But on what? Still, if I have to go live in a motorhome, it's still not the end of the world. Me worry?

I don't need a lot of money to spend, but I cannot have too much to count. Counting money is fun. And as I am not a passive index investor, it shows me I am doing something right.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 11-17-2016, 08:53 AM   #110
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: 19,827
Quote:
Originally Posted by NW-Bound View Post
About drawing 4% of current portfolio value and not spend it all during market good years to save to splurge later, what about going ahead and spend it, but on non-recurring expenses?
Well, first - you would have to have something to spend it on. Spending does take effort, at least for me. I like to have good value for my money. And I don't care to accumulate more stuff. I don't just spend it because it's there (no burning sensation in pocket). Our spending is increasing gradually which is how I prefer it.

But the main thing is that I know that even though times are good now, we will get to periods where times are bad. For peace of mind I prefer to have a war chest (as I call my accumulating unspent funds) set aside to help me during those bad times. I can see my portfolio shrink drastically, thus lowering my annual income. But I know I have the war chest to fall back on.

Right now I feel like there is a lot of financial uncertainty. I may need to draw on my war chest for significantly increased health care expenses in the future, for example. It could be a myriad of things. I might need to help family out, who knows! I see my accumulating unspent funds as increasing my financial security which helps my peace of mind.

Non-recurring expenses - the war chest is available for that too. I feel like I can do both. We will purchase a new car soon, and will dip into the war chest for that. I just won't spend all the war chest on non-recurring expenses.

IMO, as long as I have enough invested in my retirement portfolio to meet my withdrawal goals for the next 40 years, my portfolio should survive just fine without returning unspent funds to it or lowering my withdrawal rate. Chances are it will still grow to be quite large when I pass even though my goal is for it to be small without going to zero.

FWIW my withdrawal rate is 3.3% of remaining portfolio, which I consider to be reasonably conservative for a 40 year period, although others may consider that high. You pick your number and try to live with it.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 11-17-2016, 08:58 AM   #111
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 22,097
I do not have the urge to spend either. If and when I do, I look at what I have spent, and what FIRECalc says I could. The difference is my margin of safety (if it really exists).

People do different things to feel safe. My motorhome is my housing of last resort. Seeing it parked out there makes me feel safe. No bridges or freeway underpasses for me.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 11-17-2016, 09:05 AM   #112
Moderator
samclem's Avatar
 
Join Date: May 2004
Posts: 12,867
Quote:
Originally Posted by audreyh1 View Post
Quote:
(Gone4Good quote from another thread)My approach is to discount current markets back to a level that represents the median valuation of the data set used to originally calculate your SWR. If you're using FIRECalc and PE-10, that would mean discounting the current equity market down to a valuation of about 16x from it's current 24x (a 33% haircut).

I'd also do the same thing with the bond market. 10-year treasuries are yielding 1.74% versus a median of 3.89%. Using an average bond market duration of about 6 years, that 200bp lower current yield results in a price discount of about 12%.

So assuming a 1MM portfolio and a 50/50 asset allocation, I'd mark the $500,000 in stocks down by 33% to $333,000 and the bond allocation down by 12% to $440,000.

My resulting $773,000 portfolio puts me right in the middle of the valuations used in our historic data set. Applying a 4% SWR, I get a withdrawal of about $31,000.

That means my undiscounted portfolio can support a withdrawal rate of 3.1%. Said another way, a 3.1% withdrawal today is equivalent to a 4% withdrawal at median valuations.
That seems like a good way to model things. But at the same time, since 4% is supposed to work for (most of) the bad sequences of market returns, it seems too conservative to use for median market valuation cases. Seems like you could use a higher withdrawal percent in those cases - like 5% or higher.
I'll continue the discussion in the previous thread on this (here). But, it looks like the safe withdrawal rate (end-of-year portfolio method) when using this valuation weighting scheme might be somewhere between 4% and 4.4% (assumptions: 30 yr, 50% TM/50% 5yr Treas).
samclem is online now   Reply With Quote
Old 11-17-2016, 09:15 AM   #113
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 19,872
Quote:
Originally Posted by donheff View Post
I don't understand why people have problems with audrey1's approach. ...
I'm not sure why you say people are having 'problems with her approach'? The approach is fine, IMO.

The problem I have is the terminology, which makes communication and learning difficult. If you talk about WR% and success/failure of a portfolio, but you took money out of the portfolio, set it aside, and don't include it in those calculations, it just confuses things.

What you are really doing is changing your AA to an increased cash holding. That makes is consistent with other conversations/questions about portfolio survival.


Quote:
Originally Posted by W2R View Post
... I don't see how you all can manage with a 4% withdrawal every year and still have enough for a big expenditure that could happen every decade or two ...
People don't have consistent withdraw amounts every year. I think there have been numerous discussions on accounting for lump sum expenditures, new cars, remodels, repairs, etc. Many ways to handle it.

The approach I would take in your case, prior to buying the new home would be simple - estimate what your portfolio balance would be after the reduction for the house, and look at what your WR% would be going forward. A FIRECalc run would be helpful, as you could enter your updated regular expenses, and any changes in income (any pension, SS, tax changes? not div/return changes, that is part of the calculation FC does).

If the post home purchase numbers look comfortable, you are fine (and it looks like you are). If they don't, then re-think the home purchase, or decide that the new home is a reasonable trade-off for a somewhat less conservative WR.

-ERD50
ERD50 is offline   Reply With Quote
Old 11-17-2016, 09:48 AM   #114
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: 19,827
Quote:
Originally Posted by ERD50 View Post
I'm not sure why you say people are having 'problems with her approach'? The approach is fine, IMO.

The problem I have is the terminology, which makes communication and learning difficult. If you talk about WR% and success/failure of a portfolio, but you took money out of the portfolio, set it aside, and don't include it in those calculations, it just confuses things.

What you are really doing is changing your AA to an increased cash holding. That makes is consistent with other conversations/questions about portfolio survival.

-ERD50
That is not correct. The AA of the portfolio has not changed. The withdrawal rate only applies to the portfolio. What happens outside the portfolio has no bearing on the portfolio AA.

IMO what would be incorrect would be to consider unspent funds magically part of the portfolio again, even though you already withdrew them.

Now if someone chooses to add unspent funds back to their portfolio thus increasing it, and takes withdrawals from the now larger remaining portfolio, that is their prerogative. In practical terms, they effectively lowered their withdrawal rate that year.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 11-17-2016, 10:01 AM   #115
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 6,158
I think all you regulars here are very well situated even with some variety of approaches. The minor details are just noise. You are probably in the <1% of those with well thought out plans. However, I appreciate the review as it's easy to forget this stuff in all the other everyday trivia.

FWIW, I now have a book entry that accumulates unspent funds in short term investment grade bonds. Over the years, I think ST IG bonds have proven themselves. I am using VPW as a guide. I consider unspent money to be a failure to have enough fun in my ever shortening lifespan.
Lsbcal is offline   Reply With Quote
Old 11-17-2016, 10:04 AM   #116
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 22,097
The main thing is to keep one's expenses low. Where you keep the money is secondary to me.

Speaking of cast as a ballast, I accumulated quite a bit in I-bonds, and as the purchasing power is preserved there, it's my floatation device. Then, I always have loose cash in nearly every account, just in the chance there's a fire sale on stocks. And there's that Stable Value fund in my wife's 401k.

With all that cash reserve, I see no need for another pile of cash. And I also thought of that as my war chest. Had I fully deployed it in 2009, I would do a lot better.

So, as we approach SS age, that's another floatation device we can use in case of need. I am slowly redeploying my pile of cash into something with a better yield. I used to have 20% or more in cash. With my wife's 401k rollover to an IRA, I found myself with even more cash to redeploy.

Been buying steadily, and still have more than 40%. Ask me if I mind if stocks or bonds crash, or both.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 11-17-2016, 10:17 AM   #117
Full time employment: Posting here.
GTFan's Avatar
 
Join Date: Apr 2013
Location: Atlanta
Posts: 737
Quote:
Originally Posted by audreyh1 View Post
That is not correct. The AA of the portfolio has not changed. The withdrawal rate only applies to the portfolio. What happens outside the portfolio has no bearing on the portfolio AA.

IMO what would be incorrect would be to consider unspent funds magically part of the portfolio again, even though you already withdrew them.

Now if someone chooses to add unspent funds back to their portfolio thus increasing it, and takes withdrawals from the now larger remaining portfolio, that is their prerogative. In practical terms, they effectively lowered their withdrawal rate that year.
Have to agree with audrey on this - where does it say in the studies that your retirement portfolio is the entire sum of your investable assets? It doesn't, and if you want to keep a separate pool of money (withdrawn from the port or not) there's no need to insist that it's part of the portfolio, for any reason.

It's not confusing to me at all wrt safe WR % and overall success.
GTFan is offline   Reply With Quote
Old 11-17-2016, 10:27 AM   #118
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 19,872
Quote:
Originally Posted by audreyh1 View Post
That is not correct. The AA of the portfolio has not changed. The withdrawal rate only applies to the portfolio. What happens outside the portfolio has no bearing on the portfolio AA.

IMO what would be incorrect would be to consider unspent funds magically part of the portfolio again, even though you already withdrew them.

Now if someone chooses to add unspent funds back to their portfolio thus increasing it, and takes withdrawals from the now larger remaining portfolio, that is their prerogative. In practical terms, they effectively lowered their withdrawal rate that year.
I believe the accepted definition of one's 'portfolio', and the one used in most communications here, is all invest-able assets.

If you withdraw assets from an account, but don't spend them, they are still invest-able assets. They just aren't in the same account as they were before. A 'portfolio' can, and often does consist of multiple 'accounts'.

You are 'compartmentalizing' the funds you withdrew from one account and placed in another. That transaction didn't change your net worth. It didn't change what you would enter into FIRECalc (other than the AA assignment, if the AA of those accounts were different).

As I said, I have no problem with the approach. I've explained my problem with the terminology, and if you don't agree after this post, I don't think you ever will. So I'm done. But I feel you are doing a disservice to others here if you discuss things like portfolio WR% and portfolio success/failure while using an alternate definition of 'portfolio'. Words have meaning, it's how we communicate.

-ERD50
ERD50 is offline   Reply With Quote
Old 11-17-2016, 10:33 AM   #119
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 19,872
Quote:
Originally Posted by GTFan View Post
Have to agree with audrey on this - where does it say in the studies that your retirement portfolio is the entire sum of your investable assets? It doesn't, and if you want to keep a separate pool of money (withdrawn from the port or not) there's no need to insist that it's part of the portfolio, for any reason.

It's not confusing to me at all wrt safe WR % and overall success.
It depends if you are talking about the success/failure of that particular pool of money. But that is not the same as the success/failure of the retiree, who depends on his/her entire portfolio.

I don't see the advantage of talking about the success/failure of a subset of my portfolio, and I do think it confuses things when people are (and should be) looking at the big picture.

An extreme example to illustrate: What if I split my portfolio into two equal sized accounts, one was 100/0 AA and the other was 0/100 AA. And then, in various posts I talked about one, but not the other - that would be confusing and misleading,and make discussion difficult, no? The reality is I would have one portfolio with a 50/50 AA. The separate accounts do not matter.

-ERD50
ERD50 is offline   Reply With Quote
Old 11-17-2016, 10:49 AM   #120
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: 19,827
Quote:
Originally Posted by ERD50 View Post
I believe the accepted definition of one's 'portfolio', and the one used in most communications here, is all invest-able assets.

If you withdraw assets from an account, but don't spend them, they are still invest-able assets. They just aren't in the same account as they were before. A 'portfolio' can, and often does consist of multiple 'accounts'.

You are 'compartmentalizing' the funds you withdrew from one account and placed in another. That transaction didn't change your net worth. It didn't change what you would enter into FIRECalc (other than the AA assignment, if the AA of those accounts were different).

As I said, I have no problem with the approach. I've explained my problem with the terminology, and if you don't agree after this post, I don't think you ever will. So I'm done. But I feel you are doing a disservice to others here if you discuss things like portfolio WR% and portfolio success/failure while using an alternate definition of 'portfolio'. Words have meaning, it's how we communicate.

-ERD50
No - I disagree. If some folks here are assuming that all investable assets must be counted as part of their retirement portfolio, and subject to the same AA across the board I don't know where they got that assumption. That is not stated in any of the studies of portfolio survival. I challenge any such "accepted" definition in this forum. I have been here a long time, and I am not the only one that does not share that assumption.

What about funds set aside for children's college? What about funds set aside of other things but not retirement such as saving for a new car or house down payment. Prudent financial planning/management recommends compartmentalizing your assets such that each can be invested according to the financial goals and timeframe for each intended purpose. No financial planning recommendation says: all investable assets must be included in your retirement portfolio, and you must apply the same AA and withdrawal rate to all those assets.
__________________

__________________
Retired since summer 1999.
audreyh1 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
Top One Percent? Half a Percent? Tenth of a Percent? medved FIRE and Money 153 06-21-2016 02:02 AM
The 4 Percent Rule: Static Decisions In A Dynamic World Midpack FIRE and Money 15 02-21-2013 05:20 PM
Zero-Percent Certificate of Indebtedness ??? Craig FIRE and Money 6 11-21-2005 05:43 PM
percent above inflation searcher FIRE and Money 15 01-10-2005 06:15 PM
Initial Withdrawal Percent? moguls FIRE and Money 7 12-20-2003 04:59 PM

» Quick Links

 
All times are GMT -6. The time now is 04:52 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.