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04-03-2012, 06:43 PM
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#1
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,200
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The Retiree Toolkit
Just a good summary of the tools we all have to work with from Wade Pfau's excellent blog. The link is worth reading in it's (short) entirety IMO.
Pensions, Retirement Planning, and Economics Blog: The Retiree Toolkit
Quote:
The Retiree Toolkit
Developing a retirement income strategy is an individualized process which uses building blocks from a retirement toolkit. No single approach or product works best for everyone. But crafting together these various pieces can help result in a strategy to obtain a sustainable income for the remainder of one’s life. I’ve taken to calling this the retiree toolkit and “building blocks” for the toolkit. Recently I read an article by Steve Vernon describing* the same basic idea, and he calls it the retirement income menu.
The way I see it, the basic building blocks for a retirement income strategy are:
1. Social Security:
2. Part-time work:
3. Bond ladders:
4. Single Premium Immediate Annuities (SPIAs):
5. Systematic withdrawals from a volatile portfolio:
6. Variable Annuities with Guaranteed Lifetime Withdrawal Benefit riders:
Other honorable mentions for this list include reverse mortgages, long-term care insurance, and life insurance.
That’s the basic list. Now it is just a matter of fleshing out the details for each of these building blocks, quantifying their pros and cons, and considering how to best combine them to help individual retirees to best meet their goals.
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__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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04-04-2012, 04:57 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
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Thank you for sharing, Midpack.
__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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04-04-2012, 06:33 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Aug 2010
Location: Back woods of Fennario
Posts: 1,170
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I'd put SS and COLA-adjusted pensions as 1A) and non-COLA adjusted pensions as 1B). I am thinking you might take a very different strategy for COLA and non-COLA income.
Number 2 made me throw up in my mouth a little bit........
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04-04-2012, 08:18 AM
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#4
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Recycles dryer sheets
Join Date: Sep 2006
Location: Fort Collins
Posts: 194
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RMDs?
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04-04-2012, 08:32 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
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Quote:
Originally Posted by LRDave
I'd put SS and COLA-adjusted pensions as 1A) and non-COLA adjusted pensions as 1B). I am thinking you might take a very different strategy for COLA and non-COLA income.
Number 2 made me throw up in my mouth a little bit........
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+1 I can't imagine a retirement tool kit that doesn't include pensions. And, it's important to differentiate between COLA and non-COLA.
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04-04-2012, 08:36 AM
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#6
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Recycles dryer sheets
Join Date: Feb 2010
Posts: 293
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Wade actually included pension is #1.
Quote:
(Any other defined benefit pensions could also be grouped in with this category if it is thought of more broadly as social capital).
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__________________
FIREd at 46, 8/31/11
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04-04-2012, 08:38 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,200
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Pensions were mentioned along with Soc Sec in 1). However, at the moment when I try the link, the blog post seems to have changed completely Not sure if it's temporary or what...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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04-04-2012, 08:42 AM
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#8
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Thinks s/he gets paid by the post
Join Date: Aug 2010
Location: Back woods of Fennario
Posts: 1,170
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Quote:
Originally Posted by Jake46
RMDs?
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http://www.early-retirement.org/foru...rum-34884.html
^^^^Acronyms found here - in FAQs ^^^^^^
(Required Minimum Distribution)
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04-04-2012, 12:13 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Mar 2007
Posts: 1,854
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Thanks Midpack, most of those already in use...a few more being looked at such as LTC.
Quote:
Originally Posted by LRDave
I'd put SS and COLA-adjusted pensions as 1A) and non-COLA adjusted pensions as 1B). I am thinking you might take a very different strategy for COLA and non-COLA income.
Number 2 made me throw up in my mouth a little bit........
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If you are a HNW (i.e. "rich") person, be careful counting SS. Any attempt to do means testing could dramatically lower or eliminate your SS payments for folks under about the age of 57. Why 57? Based on every proposal I've read over the past 2 years or so....they all protect anyone within 10 years of retirement. I'm 50...so in my planning I estimate I'll only get 50% of what SS says I will. If I end up getting more...great!!
__________________
"Live every day as if it were your last, and one day you'll be right" - unknown
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04-04-2012, 12:24 PM
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#10
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Moderator Emeritus
Join Date: Sep 2007
Posts: 17,773
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Thanks, MP.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
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04-04-2012, 02:53 PM
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#11
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Thinks s/he gets paid by the post
Join Date: May 2008
Location: Cooksburg,PA
Posts: 1,873
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Quote:
Originally Posted by obgyn65
Thank you for sharing, Midpack.
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+1
__________________
Free to canoe
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04-04-2012, 03:42 PM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
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Quote:
Originally Posted by Midpack
Pensions were mentioned along with Soc Sec in 1). However, at the moment when I try the link, the blog post seems to have changed completely Not sure if it's temporary or what...
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I had rental RE early on which I sold and consumed the cash later - all in the early phase of our ER.
heh heh heh -
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04-04-2012, 04:16 PM
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#13
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Thinks s/he gets paid by the post
Join Date: Sep 2008
Posts: 2,171
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Quote:
Originally Posted by Jake46
RMDs?
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Wouldn't RMD's fall under #5? An IRA portfolio is "volatile", isn't it--even if the IRA holds a CD ladder, the interest rates change as each CD matures and is rolled over into a new one (or not).
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