I also know now that you think that that is more of a "grandpaw" like approach and probably at 33 would favor a much more aggressive investment style. I am interested in knowing what your portfolio would look like if you wanted to generate 4% return today.
Well, again i like the 110-your age formula, regardless of whether you're retired or not. The primary purpose of that formula is to consider your investment time horizon, consider risk, and to measure the potential affect inflation can have on you.
Thinking positively, at 48, you could easily have a 40-year investment horizon. Did you know there has never been a consecutive 15 year period where stocks did not beat bonds? You can pick a start date, say 1929, 1987, 1973, etc and still, stocks always won over 15 years consecutive. I dont know offhand how long the market's been in operation (120 years or so?), but we're batting 120 for 120 using the aformentioned 15 year test. Thus using history alone, the risk is 0% if your investment horizon is 15 years.
What would i do at 48? Well i love mutual funds cause they're simple. I also like international investing cause it often reduces risk (due to less correlation to US stock, esp international bonds) as well as increases returns at the same time.
Using mutual funds and being conservative, id probably do:
10% Large cap growth
25% Multi-Cap International Stock (in developed countries)
15% International Bond
10% Large Cap Value
20% Small cap blend
20% Blend Domestic Corporate Bond Fund (High quality + High yield, such as Janus Flexible Income)
With the combination of Stocks Bonds PLUS the incorporation of International invesments, you'd get a very steady "Balanced Fund" like return that will give you far above 4% most years. When you have that 1 in 10 bad year (the historic frequency balanced funds produce a negative return), just make adjustments to your withdrawal rate.
Yes, i'm aware that's 40% in foreign countries. Wanna talk about risk though? Risking is putting most of your eggs in one country. Yes, that includes the US.