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Old 02-14-2017, 05:53 PM   #41
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Originally Posted by Lsbcal View Post
Probably depends on several factors. We do draw from my largish IRA first and then blend with some Roth money to manage taxes effeciently. No way to impact the IRA size enough to change the RMD taxes.
That's what i-orp recommends for me (IRA money plus a little Roth). I plan to take the IRA (actually 401k) money out in December (due to mandatory withholding), and take Roth money "whenever".
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Old 02-15-2017, 07:11 AM   #42
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All this emphasis on technical aspects of money withdrawal in retirement is just a cult pastime. The "insights"are nothing more than curve fitting and data mining. A % of current portfolio taken each year trades yearly spending fluctuations of allowed spending for a much smaller chance of bombing out. I happen to think that this is the only rational approach. If one wants to also smooth annual spend. he or she must give up some of the failure-proof features of an annual % of current portfolio. Depending on assumptions and the data marshaled to support this or that plan, some paln will look better or worse than others.

I personally cut back hard under stress, and for me that has been possible. It may not always be, or it may never be for some retirees

To take an adequate draw to maintain a jobless life depends on a) do you have a pension? With a good (govt) pension, history has shown that one really does not need much else. 2) if no pension do you have enough capital? How much capital is dependent on lots of things, but almost never on which sensible withdrawal scheme you choose. There really cannot be any magic here. Spend your effort on collecting pensions, on making more money while working, on socking away more money while working, and on investing this money profitably and sensibly. When retired, give thought to controlling your expenses in ways that have fewer negative effects on your happiness 3) Do you feel lucky? IMO, we have all been quite lucky since 2009. Equities have done way better than the underlying businesses, and bonds have not yet fallen back to levels that normal interest rates would require. This is likely more luck than we can count on always having.

Last point- a withdrawal rate higher than the cash generation of the underlying securities is clearly going to be time limited. This is the old "don't eat the seed corn" argument. This cannot be wrong over time.

Ha
Lots of excellent points.

I would tweak your seed corn statement to say

"Last point- a withdrawal rate higher than the total return of the underlying securities is clearly going to be time limited."

You can actually exceed cash generation, if you do not spend all of the increase.
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Old 02-15-2017, 09:24 AM   #43
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....This is the old "don't eat the seed corn" argument. This cannot be wrong over time.
"Don't eat the seed corn" is a smart philosophy for those that
(a) are happy to work long enough to
(b) develop high enough assets to
(c) support low enough yearly spending and are
(d) happy to have money left over at their passing for beneficiaries or other causes.

I gave significant thought to that philosophy before retiring partly because i have kids that would benefit from the large amount that would be left over after my passing (item d above). I thought of working those extra years as basically just working for them. When I honestly looked at our numbers and the market expected returns, I decided that this philosphy would require too many of my remaining years to address a very small probability that our money would not outlast us. Thus began the exploring what HaHa calls the "cult past time" methods.

In our case, there is still a very high probability that the kids will still have much passed on to them even using "3-Peat" or similar methods. Chances for running out of funds before we pass is basically nil unless dramatic changes occur in the economy and we blindly (and stupidly) keep spending at maximum levels. Eventually that could lead to our maximum yearly available spending funds being less than non-discretionary spending and the plan would "fail". Not likely for us but something anyone considering "eating the corn seed" should consider.

Good discussion.
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Old 02-15-2017, 09:47 AM   #44
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Originally Posted by Montecfo View Post
Lots of excellent points.

I would tweak your seed corn statement to say

"Last point- a withdrawal rate higher than the total return of the underlying securities is clearly going to be time limited."

You can actually exceed cash generation, if you do not spend all of the increase.
I agree completely with this. I was referring to the internal free cash generated by the securities, not the payouts to holders. Total return is certainly a way to approach this, but total return can deviate markedly based on current emotions in the market.

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Old 02-15-2017, 08:29 PM   #45
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Concerning the 3-PEAT Android app, only 3 downloads to the beta release, and no feedback as of yet.

I released the app to the Google Play Store just now, so should be discoverable in the PlayStore in a few hours. That means no need to go to the beta link any more...just search for it and install it. I can't imagine it will generate a big following, but I'm ready to move on to writing another app now. You can email me from the app if you are wondering about something or can think of more features.
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