Recent content by ral3210

Please note the comparison was done taking the SPIA payout rate without inflation adjustment from the balanced portfolio. Assuming a 20 to 25 year life span at retirement I would much rather take more earlier. Knowing that spending declines for most people as they age many would be better off...

With the stock market underperforming its long term average the past 23 years (i.e., approximately 6.5% for the S&P with gut wrenching drawdowns vs 9 to 10% historically) and with stocks still significantly overvalued by most measures that have good forecasting ability I think many investors...

I agree that the OP can do better. I think SPIAs can be great for many investors presently--especially if you believe the overwhelming evidence that spending generally goes down as we age and a dollar in your 60s is much more valuable than one in your 80s. With this in mind I looked at...

I like your outlook but I personally know many people who had it made financially and said they would cut back if and when they are forced to. The took a lot of equity risk that they did not need to take. Life often does not work out the way we want it to. Markets don't keep going up. These...

The speaker makes a lot of sense regarding the uncertainty of future returns, as well as his comment regarding one's job stability and investing risk levels. To say the future will be like the past may not be right. But, no one really knows what the future will be like. In response it is...

You might be right. If so, I applaud those who can keep "their head when all about them are losing theirs." However, most of the polls I have seen on this board have very few respondents compared to the views on their corresponding threads. Therefore, they are subject to nonresponse bias, as...

No, that is not what I am saying. Even if you are a true buy and holder there are advantages to having steady income, (SPIA being one vehicle). Regarding stocks, most people do not earn the market return. You might, but most do not b/c of greed and fear.

You are correct! I used 50/50 stock-bond asset allocation and a 1% expense ratio. The 1% ER is below the normal ER and seems reasonable. Regarding stock exposure, I don't think many 65 to 85 year old's are comfortable with even a 50% exposure to stocks. You are correct regarding the...

Nope--I am a finance professor.

Good point! I would certainly want to be able to cover my basic expenses, including home carrying costs, car expenses, groceries, health insurance, and utilities with guaranteed income (i.e., ss, pension, or annuity (an/or individual bonds for those who want to take a little more risk).

First, the annuity holder is better off b/c he starts the 25 year period withdrawing almost twice the balanced investor ($66,000 vs $35,000). This diminishes over time. I think most would rather have $66,000 noncola than $35,000 cola when it takes 21 years (i.e., age 86 in my example) to...

If people do not have a bequeath motive, and if one believes Firecalc calculations will be representative of the future, I do not understand why most people would not place at least half of their nest egg in an annuity. Let's do the numbers to compare apples with apples: 65 year old man with...

Agreed. Depending on what about of money one has at risk very few people can tolerate 100% equity portfolio. If one had $1,000,000 in equities and lost 50% during a bear market, how many in the population would stay in 100% equity?

Scott Burn's article today by above title shows that most portfolios mimicking balanced funds and withdrawing an inflation-adjusted 4% during the past 51 months would be show an average lost of 15% of the beginning value. My guess is that most people do not strictly adhere to the 4% adjusted...

Those are great points. Does anyone know of data from the 1950s, 60s and 70s that might support or conflict with the consumer finance surveys of 1984 to present?