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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 12:41 AM   #21
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Re: Ultra Conservative Retirement Planners

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Originally Posted by HaHa
This guy has only made 16 posts since Dec 1, 2006. How could they be repetitive? I looked back, and most of his posts don't seem to be about this issue at all.
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Originally Posted by Bikerdude
Say what dude? DYAM, you got to bring the diatribe down to the lowest common denominator. You know what I mean?
Eh, this post wasn't about equities. No need to bring up the subject at all, let alone troll for a controversial response.

You guys can go read all his posts just as well as I can, and form your own opinions.
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 04:47 AM   #22
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Re: Ultra Conservative Retirement Planners

Interesting! Differing opinions upset the equilibrium. Should we all remain

Hey, a controversial post is not a bad thing. It gets people thinking and questioning their approach. This is a good thing. If you get too complacent, the market gremlins will get you!

It all started with an question about the difference between two tools. Hellbender's response is a bit thin on substance and long on opinion. He is questioning the status quo (on this board). He might be doing it to get a rise out of a few people. That's ok. It breaks the conversation out of the chant (as HA pointed out).

I probably will always question my approach and be looking over my shoulders during ER. Matter of fact, I am working on contingency plans for certain events so I do not have to rely on a knee jerk reaction if they occur or wind up like a deer staring in the headlights of a semi and get mowed down.

I will follow a conservative balanced indexing approach. Why. Because I am done trying to "hit the lottery" (so to speak) in the market. If I can get 8-10% I am please as punch. Reality is I might wind up with more like 6-8%. From here, I just want to know how to smooth out the waves of the ocean and avoid the storms so the boat doesn't get swamped. That is why I diversify.

I look at swr as a guideline, not a hard fast rule. The WR amount will always be a fairly low % if the time horizon is a long time and you want the funding to last.

I am pleased that I have some people to compare notes with. I learn some things when I peruse the board. But I take nothing that I read (about investment advice) as much more than opinion... or someone sharing something that they read. A word to the wise for everyone. Fact check, cross-check... Do not assume that what you read is reliable fact. No offense, but I would not follow advice from anyone, anywhere, at anytime in matters of finance without checking it out.

I am going to run a poll to see how many real experts we have on manging the draw-down phase. How many pension actuaries are on the board and/or Life Insurance actuaries that design the product (i.e., funding/expenses). I will bet the answer is very close to ZERO... I would be surprised if there were 1 or 2.


Are there and FSAs out there?

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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 08:45 AM   #23
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Re: Ultra Conservative Retirement Planners

Thanks for the interesting dialog! I am in a learning mode and all input is appreciated - doesn't mean I would agree...
I heard Dave Ramsey (get out of debt guru) tell some gal that with a good growth stock mutal fund she could get 12% draw 8% and leave 4% for inflation - that was for 600k. Talk about optomistic. Firecalc is wayyyyy conservative compared to that comment. dog
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 08:48 AM   #24
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Re: Ultra Conservative Retirement Planners

Quote:
Originally Posted by smileydog
Thanks for the interesting dialog! I am in a learning mode and all input is appreciated - doesn't mean I would agree...
I heard Dave Ramsey (get out of debt guru) tell some gal that with a good growth stock mutal fund she could get 12% draw 8% and leave 4% for inflation - that was for 600k. Talk about optomistic. Firecalc is wayyyyy conservative compared to that comment. dog
That's why Dave Ramsey's program is so religious. You've got to pray for a miracle for that plan to work
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 08:51 AM   #25
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Re: Ultra Conservative Retirement Planners

Quote:
Originally Posted by HaHa


This guy has only made 16 posts since Dec 1, 2006. How could they be repetitive? I looked back, and most of his posts don't seem to be about this issue at all.

IMO we have plenty of equity cheerleaders on board, why does someone who has another point of view have to come up with an alternate calculator to be allowed to put forth that point of view? He didn’t say that others were wrong, just that he thinks there are potential flaws in relying too heavily on FireCalc.

Anyway, his criticism of FireCalc is accurate. One additional sequence worse than what is already in the database will ipso facto lower SWRs. Whether this is likely or not is another question and one that will depend on how the future unfolds.

I know what everyone who posts about index funds and SWRs thinks. They may be 100% correct. But I don't know about Hellbender's experience buying riverfront lots for $67,500, moving a little dirt and reselling for a good profit.

I personally would rather hear that than the 900 millionth post on how marvelous indexing is- even if it is indeed marvelous.

Ha
Thank you. I am amazed to see the level of defensiveness, ire and personal attacks preciptated by my observations. It is truly incredible that the merest hint that I prefer to invest in something other than equities, or that the Firecalc tool is anything less than perfect results in such smears and exaggerations. Talk about your Pavlovian responses.

If anyone (other than astromeria) thinks they have the right to speak for this forum in condemning me, and further - to legislate what constititutes acceptable opinion or content in my posts, then they are going to be very dissappointed.

I have always found that I learn much more from those that disagree with me. That is part of the reason I am here. It helps me to grow as an individual and sharpen my philiosophy. There is a price to be paid though. . . . . from time to time I encounter individuals who are so insecure that they must surround temselves with those who mimic (or at least don't question) their views. As a natural result, over time they begin to find the ideas of others so intolerable that they must resort to exaggeration and personal attacks.

The business of SWRs, indexing and calculators grew old for me a long time ago. I consider the knowledge valuable, even though I don't utilize it often myself. I find more value in questioning the status quo than in wrapping myself with a fuzzy security blanket of like-thinkers and defending the status quo vehemently against all comers. That would be easy.
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 09:03 AM   #26
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Re: Ultra Conservative Retirement Planners

Quote:
Originally Posted by smileydog
Thanks for the interesting dialog! I am in a learning mode and all input is appreciated - doesn't mean I would agree...
I heard Dave Ramsey (get out of debt guru) tell some gal that with a good growth stock mutal fund she could get 12% draw 8% and leave 4% for inflation - that was for 600k. Talk about optomistic. Firecalc is wayyyyy conservative compared to that comment. dog
I heard him recently and I was amazed at the returns he was telling people.
He has a good basic concept for the mass of people - no debt & get a budget.
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 09:10 AM   #27
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Re: Ultra Conservative Retirement Planners

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Originally Posted by dex
I heard him recently and I was amazed at the returns he was telling people.
He has a good basic concept for the mass of people - no debt & get a budget.
You are right. I was talking to a coworker that follows Ramsey. He take the thrifty advice about borrowing and expenditures... but he is going to a financial planner to help plot his retirement plan. I told him "Good idea".
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 09:13 AM   #28
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Re: Ultra Conservative Retirement Planners

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Originally Posted by hellbender
I personally would favor a more conservative approach than that utilized by the Firecalc methodology. Firecalc defines "success" as not running completely out of money.
No. You enter the floor level of money defining failure as an option. It's in the instructions.
Quote:
I believe it unrealistic to adopt a model which assumes that one must hang on to an equity-rich portfolio anywhere near such precarious position.
No. The user defines the percentage of equities in Firecalc. Check the instructions.
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 09:17 AM   #29
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Re: Ultra Conservative Retirement Planners

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Originally Posted by chinaco
he is going to a financial planner to help plot his retirement plan.
Hmmmmm......sounds like out of the frying pan and into the fire!
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 09:20 AM   #30
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Re: Ultra Conservative Retirement Planners

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Originally Posted by youbet
Hmmmmm......sounds like out of the frying pan and into the fire!
Understand... But if one is unsure how to proceed, and is not willing to spend time educating themselves, it is probably the next best thing. Better than flying blind.

I advised him to do a fee based advisor. He has a VG account. I told him to try that route.

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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 09:24 AM   #31
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Re: Ultra Conservative Retirement Planners

Quote:
Originally Posted by hellbender

I have always found that I learn much more from those that disagree with me.
It appears you are getting quite an education.

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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 09:27 AM   #32
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Re: Ultra Conservative Retirement Planners

I just had my first success in several decades of preaching trying to convince someone to fire their "planner" and take charge of their own destiny (with much lower fees and better returns). I showed him FIRECalc and how indexing would have beaten his "planner's" portfolio return he had been getting. The clincher was when he got a letter from his "planner" in response to his question as to when he could afford to retire that said he had to work approximately another 10 years -- he is now 63!

His FIRECalc run said he was very safe retiring now. "Planner" fired.
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 09:30 AM   #33
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Re: Ultra Conservative Retirement Planners

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Originally Posted by 2B
I just had my first success in several decades of preaching trying to convince someone to fire their "planner" and take charge of their own destiny (with much lower fees and better returns). I showed him FIRECalc and how indexing would have beaten his "planner's" portfolio return he had been getting. The clincher was when he got a letter from his "planner" in response to his question as to when he could afford to retire that said he had to work approximately another 10 years -- he is now 63!

His FIRECalc run said he was very safe retiring now. "Planner" fired.
The planner probably meant for your friend to delay retiring for another 10 years until the planner is FI.
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 10:44 AM   #34
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Re: Ultra Conservative Retirement Planners

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Originally Posted by hellbender
The Firecalc model defines success based on the "worst historical market performance". The worst market peformance ever experienced will never get better. Therefore SWRs calculated using this methodology, in the fullness of time, may go lower (market performance occurs which is worse than that ever previously experienced) but they will never go higher.
Um, yeah and? Firecalc is a helpful tool, but it has its limitations and cannot be substitued for judgement.
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 11:05 AM   #35
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Re: Ultra Conservative Retirement Planners

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Originally Posted by youbet
No. You enter the floor level of money defining failure as an option. It's in the instructions.
This is true; but in several years I do not remember seeing anyone post "I have 4% SWR, with starting level of x and minimum touch level of x/2."

I used "advanced Firecalc" to model this and think it is a much more psychologically realistic approach. There was not much interest though, for the simple reason that is severely limits how high you can go with your withdrawals.

More posters seem to favor the idea that they will adapt to hardship on the fly, or that Bernicke or whoever will be correct and they won't need the amount of money that it currently appears that they need and they can still go on to draw their 4+% and get the hell out of the cube now rather than later.

Ha
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 11:57 AM   #36
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Re: Ultra Conservative Retirement Planners

Quote:
Originally Posted by HaHa
This is true; but in several years I do not remember seeing anyone post "I have 4% SWR, with starting level of x and minimum touch level of x/2."
I beg to differ -- Cut Throat has frequently mentioned his "trailer down by the trout stream" as a fall back option and others have talked about minimal cost of living options should things go bad.

Quote:
Originally Posted by HaHa
More posters seem to favor the idea that they will adapt to hardship on the fly, or that Bernicke or whoever will be correct and they won't need the amount of money that it currently appears that they need and they can still go on to draw their 4+% and get the hell out of the cube now rather than later.
I am a believer in Bernicke. Spending will drop naturally even if assets would support a higher spending level. I agree with his approach and my personal experience with my parents and in-laws have both been consistent with his findings.

My personal FIRECalc runs would support a Bernicke withdrawl rate that is about 40% higher than my "straight" run. If I was a true believer, I'd be long gone but I am enough of a believer that I'm not waiting until I have a 95% SWR. FIRECalc says that's another 5 years in the future and I don't want to wait that long.

My personal plan has minimum living expenses "forever," a minimum portfolio level (long term care) and a "fun fund" for travel until I'm 75. If things go well, I can travel until I enter the "Shady Acres Retirement Home." If things don't go well, my travel is curtailed a little early.

Is FIRECalc perfect? Is it an accurate prediction of the market's future? The answer to both questions is a definite "no." We don't know what will happen in the future to the economy, stock/bond markets or our health. We are faced with an infinite amount of uncertainty but we all must decide for ourselves when we are willing to take the leap.

Those of us with large COLA'd pensions (not me) have a definite advantage over the amount of financial risk they will need to make to successfully RE. Those of us that have SS and only their personal assets have a harder decision with much greater risk.

I'd love to have the financial resources to be able to say I could buy 30 years of laddered Treasuries that would yield 5X my desired living expenses. However if I did, I'd ask myself why I w*rked so long before retiring.
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 12:08 PM   #37
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Re: Ultra Conservative Retirement Planners

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I beg to differ -- Cut Throat has frequently mentioned his "trailer down by the trout stream" as a fall back option and others have talked about minimal cost of living options should things go bad.
Well, you may be differing with someone, but not with me. You must not have read what I said.

Ha
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 12:15 PM   #38
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Re: Ultra Conservative Retirement Planners

Quote:
Originally Posted by HaHa
Well, you may be differing with someone, but not with me. You must not have read what I said.
Hey, I read what you said, and it took me a couple of passes to be able to parse it.

Let me try to translate "minimum touch level":

FIREcalc defines failure as running out of assets (by default). Ha defines failure as initial assets getting cut in half.

Was I close? Personally, I like the idea. It cuts the 4% WR success rate from 94% to 67% for the default case.
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 12:30 PM   #39
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Re: Ultra Conservative Retirement Planners

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Originally Posted by wab
Hey, I read what you said, and it took me a couple of passes to be able to parse it.

Let me try to translate "minimum touch level":

FIREcalc defines failure as running out of assets (by default). Ha defines failure as initial assets getting cut in half.

Was I close? Personally, I like the idea. It cuts the 4% WR success rate from 94% to 67% for the default case.
Not only close, but on the button.

Ha
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Re: Ultra Conservative Retirement Planners
Old 04-06-2007, 01:01 PM   #40
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Re: Ultra Conservative Retirement Planners

"The Firecalc model defines success based on the "worst historical market performance"- note that should be "worst US historical market performance".
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