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Another LBYM fan
Old 01-01-2009, 02:34 PM   #1
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Another LBYM fan

I ran across this piece on yahoo today. It seems that there are more and more LBYM fans speaking up these days. Sure hope that there are many, many more folks taking this to heart.

Quote:
Henry "Bud" K. Hebeler says that if we expect to reach our financial retirement goals, we're going to have to put the kibosh on extraneous spending and make savings a priority in our lives.

It seems simple enough, but for many Americans, giving up flat-screen TVs, luxury vehicles and the penchant for dining out is about as palatable as swallowing a spoonful of castor oil.

For those of us who have moved retirement planning to the back burner, Hebeler's back-to-basics advice is propped up by stark figures on American saving habits.


http://finance.yahoo.com/focus-retirement/article/106378/Retirement-Myths-and-Realities?mod=retirement-preparation
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Old 01-01-2009, 02:43 PM   #2
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There might be an opportunity for good capitalists to market bumper stickers and T-shirts saying "I was frugal before frugal was cool."

Of course, the trick is to get the frugal to spend their money to buy them...
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Old 01-01-2009, 02:52 PM   #3
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from the article:
Quote:
Those who retired in 1965 would have used up the entire $950,000 in 25 years if they only spent $15,000 a year, not $50,000. On the other hand, they could have spent $108,000 if they had retired in 1948. This difference is staggering. All of this with only 40 percent stock allocation. Also those who retired in 1965 had higher taxes than those who retired in 1948, thus delivering another crippling blow.
That is scary to think that in 1965 a mix of 40/50/10 only had a SWR of 1.5%, but you would not know this when you set out.
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Old 01-01-2009, 03:23 PM   #4
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Originally Posted by ziggy29 View Post
There might be an opportunity for good capitalists to market bumper stickers and T-shirts saying "I was frugal before frugal was cool."

Of course, the trick is to get the frugal to spend their money to buy them...
Not a problem, the one's who would buy them are the posers - a much bigger market!
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Old 01-02-2009, 12:22 AM   #5
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Quote:
Originally Posted by mickeyd View Post
I ran across this piece on yahoo today. It seems that there are more and more LBYM fans speaking up these days. Sure hope that there are many, many more folks taking this to heart.
Hebeler's been writing this for years-- I think I started reading his articles & book in the early 2000s. I guess he's one of the first to go for a variable withdrawal rate, and I'm pretty sure he's the only one with such a tight negative feedback loop.

Good advice from a guy who knows far too many widows trying to make it on Social Security survivor's benefits.
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Old 01-03-2009, 12:44 AM   #6
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Quote:
Originally Posted by Alan View Post
from the article:

That is scary to think that in 1965 a mix of 40/50/10 only had a SWR of 1.5%, but you would not know this when you set out.
SWR of 1.5% ! Mamma Mia ! We are all doomed !!!

I better dig up recipes using Spam as the main ingredient.
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Old 01-03-2009, 12:51 AM   #7
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SWR of 1.5% ! Mamma Mia ! We are all doomed !!!

I better dig up recipes using Spam as the main ingredient.
Spam? You must be rich! I think beans & oats and seeds planted in pots or replacing backyard sod! Now, if I can only find my hoe.
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Old 01-03-2009, 01:19 AM   #8
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Not a problem, the one's who would buy them are the posers - a much bigger market!
Or you can use the old reverse psychology on them. Make shirts that say "Don't waste your money on shirts like this!"
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Old 01-03-2009, 11:22 AM   #9
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Quote:
if I can only find my hoe.
Where did you leave her?
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Old 01-04-2009, 02:12 PM   #10
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Originally Posted by crazy connie View Post
Spam? You must be rich! I think beans & oats and seeds planted in pots or replacing backyard sod! Now, if I can only find my hoe.
I've eaten Spam, and though not crazy about it, actually do not see what the big fuss is. Hawaiians eat it by the shipload. My concern is that it seems to have a lot of fat, which likely shortens my life, which in turn allows a higher SWR than 1.5%. Hmm... Where's the equilibrium point?

Still, no comments on this 1.5% SWR? Do forum members disregard this data point, or do we play ostrich? Comments please.
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Old 01-05-2009, 10:27 AM   #11
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Originally Posted by NW-Bound View Post
Still, no comments on this 1.5% SWR? Do forum members disregard this data point, or do we play ostrich? Comments please.
If you haven't already, you could read Hebeler's articles at http://www.analyzenow.com/ or a library copy of his 2001 book "J. K. Lasserís Your Winning Retirement Plan".

IIRC he was an aero engineer before becoming Boeing's CFO so his retirement planning tends to include a belt, suspenders, frequent mirror checks, and an occasional staple...

As far as 1.5% SWR goes, that's way too conservative when even the S&P dividend rate is higher.
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Old 01-06-2009, 10:21 AM   #12
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Was anybody thinking they could just put their funds in a set position when you retire, and never think about the money again? If you are smart enough to invest wisely when you are working, why wouldn't you do the same when you are retired? Changes in the tax code alone can prompt a shift in positions. Or times of glaring uncertainty - like now - require a modicum of new thinking about where you are keeping your money.

That 1965 number must be heavily influenced by the "Carter inflation" years. Seventeen percent inflation will eat you alive if you don't move to a safe harbor.
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