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10-15-2018, 07:05 PM
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#21
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,015
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It doesn’t really matter how liquid that 25% CDs,mmkts is covering 10 years expenses. If your 65% equities gets cut in half, a huge chunk of that 25% cash equivalents will be needed to rebalance sacrificing some years of covered expenses. Unless you decide not to rebalance......
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Retired since summer 1999.
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10-16-2018, 10:57 AM
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#23
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Recycles dryer sheets
Join Date: Nov 2011
Posts: 69
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Quote:
Originally Posted by big-papa
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From the article: " Thus, for instance, the “rule” might be that any time the account balance is up 50% over the original value, spending is increased by 10% (over and above any ongoing inflation adjustments), but such spending bumps can only occur once every 3 years at most (to avoid having spending ratchet too high too quickly)."
Interesting article overall! Thanks for sharing.
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~Michele
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10-16-2018, 01:31 PM
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#24
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Thinks s/he gets paid by the post
Join Date: Nov 2014
Location: Austin
Posts: 1,382
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Quote:
Originally Posted by Reach
From the article: "Thus, for instance, the “rule” might be that any time the account balance is up 50% over the original value, spending is increased by 10% (over and above any ongoing inflation adjustments), but such spending bumps can only occur once every 3 years at most (to avoid having spending ratchet too high too quickly)."
Interesting article overall! Thanks for sharing.
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No problem! One of the things that Michael didn't clarify in the article is whether the 50% number is inflation adjusted or nominal. Somebody asked the question in the feedback section at the bottom of the article, but it went unanswered. Because I'm not a fan of any fixed-percentage-increased-by-inflation type of withdrawal method, I haven't backtested it. But not knowing anything else, I would suspect that the 50% number is inflation adjusted.
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