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Old 10-15-2018, 07:05 PM   #21
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Good point - 1966 to the early 80's . With AA at 65/10/25 and the 25% pretty liquid (CDs,mmkts) that should help. Sacrificing return for piece of mind with the liquid portion of our AA. The 25% is 10 yrs. expenses for us, if inflation doesn't go too crazy.
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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Old 10-16-2018, 06:05 AM   #22
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Retirement researcher Michael Kitces wrote about a systematic way to ratchet up your withdrawal rate here: https://www.kitces.com/blog/the-ratc...of-the-4-rule/
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Old 10-16-2018, 10:57 AM   #23
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Retirement researcher Michael Kitces wrote about a systematic way to ratchet up your withdrawal rate here: https://www.kitces.com/blog/the-ratc...of-the-4-rule/
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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Old 10-16-2018, 01:31 PM   #24
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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.
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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