Insured & Uninsured Income Streams: Combination to ensure security for retirement

[AdventuresAddict]

To reply:
1) why am I here? Just to learn and discuss, just like all of you guys. I am planning for my early retirement now also. Not to sell to anyone. As most of you guys are Americans, and few if any would be Singaporeans like I, this would be the wrong place to do e-marketing! Haha.
2) Regarding the DIY preference. I think I had explained why from a retirement planning perspective, sometimes we need to transfer the risk to a financial institution in areas where the risk is undesired. As a retiree, you wouldn't want the risks of running out of monthly income as much as you wouldn't want to be down with long-term care, hospitalization, etc uninsured. As such, I argue that the survival income portion of your planned income stream should be an insured source. The principle is the same as why you'd--even as a retiree---want to buy long-term care and medical insurance. It's for risk transfer because you do not want to self-insure this risk. It's even more important, in my view, if your nest egg is not big, because a major slide in the financial market could reduce your capital significantly. As George Soros says, the situation today is totally different. The financial system and economic order have totally changed today, with financial derivatives (such as CDO) spreading like epidemic. You don't have to agree with me. But in a forum like this, everyone is here to share his ideas. My point is that you should seek more protection for your survival income stream since the volatility is much higher today than it was decades back, from which data supporting the SWR research is derived.

 

[AdventuresAddict]

Please go spam other boards.

Do financial planners always have to be spammers? Can't they discuss like everyone else? It's as discriminatory as saying blacks shouldn't run for Presidency.

 

[Khan]

Do financial planners always have to be spammers? Can't they discuss like everyone else? It's as discriminatory as saying blacks shouldn't run for Presidency.

Playing the persecution card: a definite strike.

 

[Notmuchlonger]

Welp didnt take long for the genderraceethnic woe is me card to be played.

 

[growing_older]

Seems earnest and sincere enough. I didn't get "persecution card" from that comment as much as attempt at analogy across cultures and maybe languages. Besides it's an interesting topic.

If you do think of dividing your resources to split off some kind of "survival" component which you are looking for greater assurance will be there, why would you trust an insurance company more than widely diversified financial instruments of your own choosing? Insurance companies do go bust and are exposed to the possibility of insider manipulation, criminal activity or just plain management incompetence. And they are dependent on the same market forces that I am dependent on as an individual investor. Not sure I see where that is any more secure than some nice index funds and good asset allocation. Short of trearuries (inflation risk) or TIPS (other complicated risks if that's all you held) I don't see any "guarantees" out there. I don't see the advantage.

 

[Hamlet]

All right, I'll feed the troll

My problem with the vast majority of annuities is that you give up an amazing amount of money to shift that risk to the insurance company, and in the end you've only changed the risk, not eliminated it.

If your portfolio under performs to the degree that it would have run out by withdrawing 4% a year, isn't that insurance company very likely to be insolvent? The insurance company is buying investments in the same stock and bond markets that we are-- if they massively under perform for a decade, the insurance company is just as likely to run into financial problems as we are. Actually, probably more likely, given the way a lot of them are run

I'd rather trust my future to a diversified portfolio of top businesses than to one insurance company, no matter how well run.

To reply:
1) why am I here? Just to learn and discuss, just like all of you guys. I am planning for my early retirement now also. Not to sell to anyone. As most of you guys are Americans, and few if any would be Singaporeans like I, this would be the wrong place to do e-marketing! Haha.
2) Regarding the DIY preference. I think I had explained why from a retirement planning perspective, sometimes we need to transfer the risk to a financial institution in areas where the risk is undesired. As a retiree, you wouldn't want the risks of running out of monthly income as much as you wouldn't want to be down with long-term care, hospitalization, etc uninsured. As such, I argue that the survival income portion of your planned income stream should be an insured source. The principle is the same as why you'd--even as a retiree---want to buy long-term care and medical insurance. It's for risk transfer because you do not want to self-insure this risk. It's even more important, in my view, if your nest egg is not big, because a major slide in the financial market could reduce your capital significantly. As George Soros says, the situation today is totally different. The financial system and economic order have totally changed today, with financial derivatives (such as CDO) spreading like epidemic. You don't have to agree with me. But in a forum like this, everyone is here to share his ideas. My point is that you should seek more protection for your survival income stream since the volatility is much higher today than it was decades back, from which data supporting the SWR research is derived.

 

[Gotadimple]

You know, you guys need to get your hormones in check. Seriously.

The individual has stated he is here to learn and to discuss retirement strategies. Rather than attack, might you try to listen to what is being offered. OP has asked AdventuresAddict to post his financial advisor bone fides. Why? He is here as a participant -- as he stated.

Moderators, I am asking if this can't be controlled within this string, that the topic be closed quickly.

--Rita

 

[Independent]

All right, I'll feed the troll

My problem with the vast majority of annuities is that you give up an amazing amount of money to shift that risk to the insurance company, and in the end you've only changed the risk, not eliminated it.

If your portfolio under performs to the degree that it would have run out by withdrawing 4% a year, isn't that insurance company very likely to be insolvent? The insurance company is buying investments in the same stock and bond markets that we are-- if they massively under perform for a decade, the insurance company is just as likely to run into financial problems as we are. Actually, probably more likely, given the way a lot of them are run

I'd rather trust my future to a diversified portfolio of top businesses than to one insurance company, no matter how well run.

You seem to be assuming that the only plausible reason to buy an annuity is to reduce investment risk. If that were true, you'd be right.

But an annuity provides longevity insurance. In fact, in a payout variable annuity, you keep the investment risk/reward and only transfer the mortality risk.

Having said that, I'll hasten to add that deferring SS (as we've all debated at length) seems like a better way to "buy and annuity" than to buy one from a private insurer.

I'll agree with AA that people with lower assets are more likely to need insurance than people with higher assets (for example, a low asset person has more reason than a person with high assets to buy collision insurance on a $10,000 car).

 

[haha]

My problem with the vast majority of annuities is that you give up an amazing amount of money to shift that risk to the insurance company, and in the end you've only changed the risk, not eliminated it.

If your portfolio under performs to the degree that it would have run out by withdrawing 4% a year, isn't that insurance company very likely to be insolvent? The insurance company is buying investments in the same stock and bond markets that we are-- if they massively under perform for a decade, the insurance company is just as likely to run into financial problems as we are.

This is likely not true. For one, only a minority of insurance companies and possibly no life companies buy much in the way of stocks. They don't seem to share our touching faith in stocks as the antidote to inflation, and they have capital surplus rules to contend with.

Regulation is state by state but there will also be pools to at least partially protect policy holders in the event of insolvancy.

Lastly, as another poster mentioned above, longevity risk is the main risk being insured against when one buys an annuity. All allocation strategies that use stocks, and any liquidating TIPS strategy is vulnerable to being outlived.

Personally I don't worry much about living too long; my main concern is not living long enough. But I know that this is a concern to many others.

Ha

 

[stephenandrew]

I am certainly no expert, but I have come to rely on Jonathan Clement's weekly "Getting Going" column in the Wall Street Journal as bineg a fiar and unbiased source of finacial guidance. He has always been a proponent of using ome of your retirement nest egg as a means of helping to insure adequate income throughout retirment. Below is an excerpt from an article he published in November of 2005:

*******************************************************
"That's a shame, because immediate-fixed annuities -- which can provide lifetime income in exchange for a lump-sum investment -- are possibly retirees' best bet for squeezing maximum income out of their retirement savings. What to do? One solution: Buy income annuities -- but buy them on the installment plan.
• Locking up income. Even without the fear factor, income annuities are a tough sell, thanks to the rotten reputation of tax-deferred variable annuities, the often-costly retirement-savings vehicles. This is a tad unfair, because immediate-fixed annuities are really a totally different animal.


In fact, buying an income annuity is more like buying high-quality bonds, but with a few key differences. An income annuity typically doesn't have any principal value, like a bond does. But the payout should be significantly higher -- and you can elect to get that income for life, thus locking up an income stream you can't outlive.
Sound appealing? If you are in poor health, an income annuity would be a lousy investment. But if your health is good, stashing maybe half your nest egg in an annuity could be a smart move.
******************************************************
I am not saying that the original poster is correct, nor am I saying Mr Clements is correct, but it would appear to me that the advice given is not far fetched. I certainly would not put all of my wealth into an annuity upon retirmement, but could see possibly putting some of it into an annuity to provide an additioanl leel of diversification/income insurance. Just becasue someone says they are a salesman, doesn;t mean they are trying to sell you something. I pesonally think this is a topic that merits some discussion--I know I could learn something.

 

[stephenandrew]

I am certainly no expert, but I have come to rely on Jonathan Clement's weekly "Getting Going" column in the Wall Street Journal as being a fair and unbiased source of finacial guidance. He has always been a proponent of using ome of your retirement nest egg as a means of helping to insure adequate income throughout retirment. Below is an excerpt from an article he published in November of 2005:

*******************************************************
"That's a shame, because immediate-fixed annuities -- which can provide lifetime income in exchange for a lump-sum investment -- are possibly retirees' best bet for squeezing maximum income out of their retirement savings. What to do? One solution: Buy income annuities -- but buy them on the installment plan.
• Locking up income. Even without the fear factor, income annuities are a tough sell, thanks to the rotten reputation of tax-deferred variable annuities, the often-costly retirement-savings vehicles. This is a tad unfair, because immediate-fixed annuities are really a totally different animal.


In fact, buying an income annuity is more like buying high-quality bonds, but with a few key differences. An income annuity typically doesn't have any principal value, like a bond does. But the payout should be significantly higher -- and you can elect to get that income for life, thus locking up an income stream you can't outlive.
Sound appealing? If you are in poor health, an income annuity would be a lousy investment. But if your health is good, stashing maybe half your nest egg in an annuity could be a smart move.
******************************************************
I am not saying that the original poster is correct, nor am I saying Mr Clements is correct, but it would appear to me that the advice given is not far fetched. I certainly would not put all of my wealth into an annuity upon retirmement, but could see possibly putting some of it into an annuity to provide an additioanl leel of diversification/income insurance. Just becasue someone says they are a salesman, doesn;t mean they are trying to sell you something. I pesonally think this is a topic that merits some discussion--I know I could learn something.

edited for some typos

 

[AdventuresAddict]

Seems earnest and sincere enough. I didn't get "persecution card" from that comment as much as attempt at analogy across cultures and maybe languages. Besides it's an interesting topic.

If you do think of dividing your resources to split off some kind of "survival" component which you are looking for greater assurance will be there, why would you trust an insurance company more than widely diversified financial instruments of your own choosing? Insurance companies do go bust and are exposed to the possibility of insider manipulation, criminal activity or just plain management incompetence. And they are dependent on the same market forces that I am dependent on as an individual investor. Not sure I see where that is any more secure than some nice index funds and good asset allocation. Short of trearuries (inflation risk) or TIPS (other complicated risks if that's all you held) I don't see any "guarantees" out there. I don't see the advantage.

What you say is true, especially of the situation in the USA! Here in Singapore, and also in UK and Switzerland, the public perception of insurance companies seems to be better, probably for good reason.

The governance of financial institutions in these countries are probably stricter. I haven't heard of any Singaporean, UK or Swiss insurance company that have gone bankrupt and are unable to meet its obligations since I was born. Even in the US, the probability of a highly rated insurance company going bankrupt is very, very small. There are still some US insurers that are rated AA and above. Alternatively, foreign insurers do offer annuities in US$.

Comparatively, the probability of you buying an insurance (annuity) and not getting paid as promised is much lesser than you investing unprofitably. Remember that while it's true that people who invest as emotionless as computers should 'theoretically' (historically) be able to derive the projected swr, most people----retirees especially---are not as emotionless and disciplined when they have a false sense of security being given the freedom to manage a large, liquid portfolio and have a lot of free time. If you had read a good book written by a psychiatrist called "The Psychology of Risk" you would understand that even professional traders get 'itchy fingers' and do silly, irrational trading because they are bored or are affected by fear or greed. As such, more than 90% of traders underperform.

Even for people who invest in index fund, as long as the liquidity is there for them to change their strategy, there is a high chance they'd get fearful enough to make changes when it's volatile, such as in the current situation. Some might liquidate to cut loss, or some to buy in at 'low price', depending on what they believe.

So in planning for retirement income, we financial planners always take into consideration the human factors. For example, although insurance may not offer a good returns, the forced regular savings design in it makes it attractive to people who procrastinate on saving. Instead of delaying saving and wait for the perfect investment opportunity to appear, it's better to start asap a regular savings program and save something. Having something is better than nothing.

Similarly, for retirees with lots of free time, it's safer for them to park some of their money in an annuity to insure against their 'moments of folly'. Remember, with online trading platforms, it takes just a few clicks to execute such 'moments of folly' trading when one is affected emotionally by fear or greed. So, if your objection is that insurance companies are not 100% secure, then my counter argument is that it's relatively more secure than self-insuring your retirement income by DIY investing. And, as I said, by diversifying your annuities to a few insurers, you further reduce your insurer and currency risks.

And lastly, regarding how the insurer can derive the returns to pay the income. Well, when you buy an insurance, you are transferring the risk to the insurance company. How it can deliver its promise is its problem, not ours. For example, the risk may be transferred to its shareholders, reinsurers, and guarantors. These parties share the risk for good reason. When the business is doing well (most of the time), they make a profit by sharing the risk of the insurance company. And, in a large pool of policyholders, some would die earlier, and their fund would add to the pool of life fund for a portfolio of annuitants. It is the actuary's job to ascertain what is a fair income that can be paid out from this life fund. But in the case of you investing your nest egg yourself, then you are assuming all the risks. You don't have the shareholders, reinsurers and guarantors coming into the picture if your portfolio underperforms and fails to deliver the 4% pa.

 

[unclemick]

Warning! I missed an appointment with some of the guys this morning - forgot daylight savings time and failed to spring ahead - no doughnuts or coffee!

So when is someone going to mention the creative use of annuities to ward off lawyers, creditors, and other various and sundry bloodsuckers encountered in America?

heh heh heh - I'm not always a sweetie! I know partnerships and other techniques are used but?? And then the ex-pat issue - citizen of the world vs the various inflation/currency problem.

 

[ats5g]

All right, I'll feed the troll

My problem with the vast majority of annuities is that you give up an amazing amount of money to shift that risk to the insurance company, and in the end you've only changed the risk, not eliminated it.

If your portfolio under performs to the degree that it would have run out by withdrawing 4% a year, isn't that insurance company very likely to be insolvent? The insurance company is buying investments in the same stock and bond markets that we are-- if they massively under perform for a decade, the insurance company is just as likely to run into financial problems as we are. Actually, probably more likely, given the way a lot of them are run

I'd rather trust my future to a diversified portfolio of top businesses than to one insurance company, no matter how well run.

The insurance company is taking your money and investing in long term fixed income. For fixed SPIA's, the insurance company is buying long term nominal bonds [gov't + corporate]. For inflation adjusted SPIA's, the insurance company is buying TIPS. This is why when interest rates go down [up], it takes more [less] money to buy the same monthly payout. IIRC, the 4% per year was only really "safe" for 30 years. If you plan on living longer than that, you'd better ratchet it down.

Now, you can certainly buy the same investments the insurance company does [i.e. long term fixed income], but the insurance company can get a big enough pool of people so they can transfer the money from the people that die before they're expected to die to the people that die after their expected to.

btw - a similar discussion was started in 2007: Rational Decumulation.

Here two other papers [the first is easier to read]:

Investing Your Lump Sum at Retirement
Asset Allocation with Annuities for Retirement Income Management

- Alec

 

[nfs]

I haven't heard of any Singaporean, UK or Swiss insurance company that have gone bankrupt and are unable to meet its obligations since I was born.

Are you less than four years old? Google for the AMP failure in Britain in 2003.

Comparatively, the probability of you buying an insurance (annuity) and not getting paid as promised is much lesser than you investing unprofitably. Remember that while it's true that people who invest as emotionless as computers should 'theoretically' (historically) be able to derive the projected swr, most people----retirees especially---are not as emotionless and disciplined when they have a false sense of security being given the freedom to manage a large, liquid portfolio and have a lot of free time. ...

So in planning for retirement income, we financial planners always take into consideration the human factors. For example, although insurance may not offer a good returns, the forced regular savings design in it makes it attractive to people who procrastinate on saving. Instead of delaying saving and wait for the perfect investment opportunity to appear, it's better to start asap a regular savings program and save something. Having something is better than nothing. ...

Translation for the layman: Individual investors are idiots. Only a planner can save an idiot investor.

Where do they manufacture this bumf?

 

[AdventuresAddict]

I'd like to add that with the biomedical field's rate of progression, we can only expect to live longer. So, any swr for 30 years or even 40 years are no guarantee of a secure stream of retirement income, especially for ER. For example, I plan to ER at 35, in 5 years. A 30-year stream of income can only last me till age 65, and a 40-year one, age 75. This is not even going to cover the current expected lifespan of people in developed countries such as US and Singapore. But it's different in the case of an annuity. It's a contractual obligation that an insurer must deliver the income, even if I live to 100 or more. And, looking at the present research, there is a high chance we will have the technology to extend our life beyond 100, in the next few decades. Already, better-educated people are able to extend their lifespan by improving their calories intake, antioxidants intake, health screening and illness preventions, and air and water quality. If they avoid the polluted and terrorists-targeted places, the chances of them dying early is further reduced. Today, you can buy a variety of health screening devices and kits and regularly get tested at home to discover symptoms early enough to render many diseases non-life-threatening. More vaccines are coming into the market to further prevent the occurrence of diseases in the first place. So, living today, we really have to craft a retirement plan that takes into consideration all these new factors.

 

[Khan]

I'm not planning on living past 80.

 

[growing_older]

I am reasonably interested in the idea that the insurance companies can provide (indirect) access to long term fixed income investments that I cannot otherwise purchase for myself. I am also likewise interested in the "insurance" aspect of the annuity in that payouts are based on actuarial calculations, since if I die too soon I won't need the money anyway and if I live longer I get the benefit of the pool with others and my income continues. (At least assuming I'm willing to give up this part of my estate passing to heirs.)

I am VERY resistant and indeed openly hostile to the notion that these products are good because their premium structures "force" me to save or because they lock me in with high fees and surrender charges that they "protect" me from my emotional inclinations to make bonehead moves in the market. Insulting.

 

[brewer12345]

Heheh, I love the contradictions here. We are all idiots, so we should all buy some annuities. Yet we are apparently also smart enough to make lifestyle choices that extend our lifespans.

We should be afraid (very) because CDOs (?) and other instruments are spreading and volatility is higher than in the recent past. Yet this will mysteriously fail to affect the creditworthiness of insurance companies that will sell us annuities. Amazing.

 

[AdventuresAddict]

Are you less than four years old? Google for the AMP failure in Britain in 2003.


Translation for the layman: Individual investors are idiots. Only a planner can save an idiot investor.

Where do they manufacture this bumf?

CNN.com - AMP blames UK market flaws - May. 15, 2003

Earlier this month, AMP announced a demerger in which it said it would hive off its loss-making UK operations into a separate listed business and take a writedown of Aust. $2.6 billion ($1.7 billion).

It also raised A$1.2 billion in fresh capital from institutional investors at A$5.50 -- shares that are already down about 8 percent.

Originally Posted by AdventuresAddict
I haven't heard of any Singaporean, UK or Swiss insurance company that have gone bankrupt and are unable to meet its obligations since I was born.

If you want to show that you are older than 3yo, can you show that AMP's insurance policies do not deliver their obligations?

 

[unclemick]

So I give up on Kansas - move to Puerto Vallarta or Cabo - buy some immediate annuities in Euro's, Swiss Franc's, Singaphore $, - and have my American SS.

If I'm not as dumb as O.J. - I'm good to go from 64 to when I croak with not too much fear from the French problem my fellow Brit's feared in the 80's. I.E. pension/inflation adjustment in home currency while you lived in another country/another inflation rate/variable currency conversion over time.

This has better odds ? than a worldwide diversified portfolio - with a current yield of 3% (U.S. $). I'm thinking of a Swede who posts at Raddr's forum.

heh heh heh - .

 

[growing_older]

I plan to ER at 35, in 5 years. A 30-year stream of income can only last me till age 65, and a 40-year one, age 75.

With these kinds of timeframes, isn't inflation protection going to be important? I'm not aware of many offering inflation protected immediate annuities to 35 year olds and those that are offer payouts on the order of 3.3% which seems a lot to pay for transferring the risk. Where would I look to find such a product with better payouts.

 

[AdventuresAddict]

Heheh, I love the contradictions here. We are all idiots, so we should all buy some annuities. Yet we are apparently also smart enough to make lifestyle choices that extend our lifespans.

We should be afraid (very) because CDOs (?) and other instruments are spreading and volatility is higher than in the recent past. Yet this will mysteriously fail to affect the creditworthiness of insurance companies that will sell us annuities. Amazing.

Insurance companies should be affected by CDO failures, but the difference is that in the case of insurance companies, comparatively, more regulations are in place to curb such risks. There are capital requirements. The types of investments that may be done are also governed. There are reinsurers, guarantors and shareholders to share the risks. There is a constant flow of funds in the form of premium payment by policyholders. These make insurance companies safer than those other institutions (eg ordinary trading companies) that don't have these, or are not required to have these. Theoretically, the only risk-free investment is government bonds, because the government can print money. Beside this, all other investments carry some risk in different degrees. So the meaningful argument is not to find a 100%-risk-free non-government-bond investment. It's meaningful only if it's about risk management. In this case, diversifying a portion of your nest egg to high-quality annuities is a calculated risk. Putting everything into uninsured portfolio of stocks and bonds may not be a good idea from the perspective of sound risk management.

 

[Hamlet]

Fair enough. For the risk adverse, immediate annuities may be a useful component to protect against longevity risk.

This is likely not true. For one, only a minority of insurance companies and possibly no life companies buy much in the way of stocks. They don't seem to share our touching faith in stocks as the antidote to inflation, and they have capital surplus rules to contend with.

Regulation is state by state but there will also be pools to at least partially protect policy holders in the event of insolvancy.

Lastly, as another poster mentioned above, longevity risk is the main risk being insured against when one buys an annuity. All allocation strategies that use stocks, and any liquidating TIPS strategy is vulnerable to being outlived.

Personally I don't worry much about living too long; my main concern is not living long enough. But I know that this is a concern to many others.

Ha

 

[AdventuresAddict]

With these kinds of timeframes, isn't inflation protection going to be important? I'm not aware of many offering inflation protected immediate annuities to 35 year olds and those that are offer payouts on the order of 3.3% which seems a lot to pay for transferring the risk. Where would I look to find such a product with better payouts.

Yup, in this case, from a financial planning perspective, I need to have more assets than 'necessary', and also use more advanced investment techniques like hedging.

Beside a portfolio of annuities, insurance and stocks and bonds, I will have an additional fund for hedging that are focused on certain sectors that I call the 'basics for survival'. When I retire, I know that some of the things are what I definitely need:
1) A roof--If I own it, I hedge the risk of not being able to rent it. I can even buy more to receive rental income, and if property prices soar, I gain even more. If not, these are just additional income.
2) Food-- Again, if I own it (stocks of companies in the food chain), I hedge the risk of not being able to buy it.
3) Healthcare--Again, if I own it (stocks of companies in the healthcare, pharmaceutical), I hedge the risk of not being able to buy it. If healthcare costs increases, I can either seek medication in cheaper places with high-quality services (eg Thailand), or pay the higher premium for my medical insurance. In this case, the expected rise in these stocks/funds could be used to offset the additional premium. I choose to use medical insurance to hedge against the inflation in healthcare costs, and healthcare stocks/ fund to hedge against the hyperinflation in the premium for these insurance.
4) Transport--Again, if I own it (stocks of companies in the energy), I hedge the risk of not being able to buy it.
5) Raw materials used to make the things I use--- Again, if I own it (stocks of companies in the natural resources), I hedge the risk of not being able to buy it.

With these, if someday the property, food (eg pork), healthcare, agricultural produce, oil or commodities happen to soar for a sustained period, then the above hedging portfolio should provide some hedging (not all forms of risks though). This is on top of what I have in the annuities portfolio that should provide an insured stream of multi-currency retirement income that is inflation-adjusted (at current rate) that should cover my basic expenses if---and only if!---things like inflation are not radical over time.

On top of these, the portfolio of diversified funds in stocks and bonds (without sectoral focus) are additional income sources. I can withdraw at a swr, say 4%, and use it for discretionary spending like traveling. When the economy is not performing well, I may delay or cancel my holiday plans in order to avoid depletion of this Additional Income Fund.

In a nutshell, in my plan, I have:
1) Annuities--survival income
2) Insurance-protection from major financial losses due to LTC, hospitalisation, etc
3) Balanced Portfolio-additional income
4) Basics for Survival Inflation Hedging- in a basket of funds focused on the sectors involved in the basic things I need for survival which may be affected by hyperinflation
5) Gold
6) Cash reserves for emergency

This means that if I want to have $40,000/y, I can't retire when I just have $1m. Probably I'd need more to allocate to the other parts of the plan other than a Balanced Fund.