Inflation rate
i agree with bbbamI..
I used 3% apy back in 99/2000 figuring out my retirement to start in 03'
For inwesting?
I also took Investment Apy's and Subtracted -20% from them to error on the side of caution of over estimating a Higher Rtn..
Eg: 8% -20% = 6.4%
that forced me to Put More into Bonds and Less went into The Equities
I did this way back in 99' fwd for my retirement
Put me Alot more Into Treas. and other Bonds than I though I would need and it Really paid off ever since for me..( although Bonds were really In the Tank in 99')
But sure saved my Butt for 00-02' and of course, last yr...
of course, I don't need more than a 2.5% YWD or from my Bonds either..and Ylds are taking care of that very nicely..So far
and they are more than taking care of both Inflation and Growth ... So far
20/20 Hindsight? Should have gone 100% bonds.. Now just holding onto my Equities until they get back to even and going to Reduce the % in them.. But, then again, I only expect about a 10 yr lifespand remaining for me..
If you think you have longer? Probably Add
1% more to your equties..
and we just might see 1980's -LT treas. +15% rates come back..so stay Short term just in case.. It won't last long.. Just like it did during the Carter Yrs..
Of cousre, I have had over 50% of my $ in ST Bonds since mid 07' and just waiting for Recovery to wind up and the Treas to start doing the same..Probably don't expect that till Next yr sometime..But that's ok, the ST Bonds are doing terrific!