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Old 03-14-2012, 10:25 AM   #61
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Originally Posted by Ed_The_Gypsy View Post
The "6%" did not just fall out of the sky.

At one time 6% was widely touted as a sound SWR, as many here will recall.

I suspect Mr. O. wanted to kill that idea up front if a reader was still entertaining 6%.
Before I read URM, I had no clue what was considered "safe" or sustainable anymore. Otar's information about the luck factor in light of what had happened to the market in 2008 was very telling. We've decided on a ISWR of less than 2.5% and have a little extra on the side that we can spend throwing caution to the wind.
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Old 03-14-2012, 10:05 PM   #62
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For 30 years, 6% would have been safe 48.6% of the time without Soc Sec, and 82.9% of the time with $16K/yr in Soc Sec. No recommendation, just what FIRECALC returns...
Midpack, you've just given me a whole new way of looking at WR's.

Firecalc tells me that with my AA, a WR of just over 7% will give me a success rate of 12.5%!

Do I feel lucky? Well, do ya, punk?
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Old 03-14-2012, 10:13 PM   #63
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Thank link appears to be dead for me, are you folks still seeing it?
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Old 03-14-2012, 11:08 PM   #64
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Thank link appears to be dead for me, are you folks still seeing it?
Post 42 in this thread will tell you what happened to it.
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Old 03-15-2012, 06:27 AM   #65
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Doesn't he even mention Fire Calc?
If he mentioned FireClac he couldn't sell his $99 spreadsheet.

Fore those needed free and compatible Microsoft Office Suite, use OpenOffice.org: it's a open source clone developed for Linux and ported to windows, and the authors consistently update and there's online support for users (third party).
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Old 03-15-2012, 07:56 AM   #66
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Originally Posted by Major Tom View Post
Midpack, you've just given me a whole new way of looking at WR's.

Firecalc tells me that with my AA, a WR of just over 7% will give me a success rate of 12.5%!

Do I feel lucky? Well, do ya, punk?
Nope...
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Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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Old 03-15-2012, 12:17 PM   #67
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For those looking for the free version of the book as listed in the second link in this thread...Jim asked them to remove the link and the book from their site.

They removed the link and the file.
Ah, thanks. Sometimes I don't read all the pages of posts LOL.
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Old 03-18-2012, 03:30 PM   #68
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Just finished Otar's book. A good read and worth the $5.99, but a couple of comments.

First off I agree that his frequent use of 6 (sometimes 5%) WR is out of line for most, if not all members of this forum.

For fixed income he mosty uses the 6mo CD rate +1%. That seems a little low for the entire fix income portion of a portfolio.

And, he rather consistently uses a 2% managment fee. Wow, who's paying that? And what would his SWRs look like with a more modest fee structure?

Finally, he really seems to like annuities. Even for the senarios for the guy who is in Otar's "green" zone, his senarios mostly involve using annuities.

Just my 2 cents worth.
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Old 03-18-2012, 03:34 PM   #69
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Otar is Canadian. Many Canadian's pay MER's in the 2%. They do not have enlightened low-expense-ratio providers of financial services. Europe may be even worse.

SPIA's are a great way to shift longevity risk to an insurance company. Once again, Otar is Canadian. He doesn't really address the fact that in the US, Social Security is essentially an inflation-adjusted SPIA that helps insure against longevity risk.
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Old 03-19-2012, 09:39 AM   #70
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Finally, he really seems to like annuities. Even for the senarios for the guy who is in Otar's "green" zone, his senarios mostly involve using annuities.
He certainly talks about annuities a lot, but I didn't read the "green zone" the way you did. While I hope to avoid buying an annuity, if I find myself in the gray or especially red zone, I think an annuity has to be a very serious consideration. YMMV
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Old 03-19-2012, 10:24 AM   #71
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I agree with Midpack. See the chart on page 470 of the book. Also @ page 471:

Conclusion:
If you are in the green zone, then any reasonable income allocation strategy works. If you want additional income security, you can build ladders for annuities, VA–GMWB’s and VA–GMIB’s. The rungs of the ladders can be one year apart or several years apart. You have the freedom to choose any strategy that makes sense.
You do not need any miracles and you do not need to take unusual risks. Ordinary market index within a balanced portfolio provides a lifelong income, and then some. If you do not like the risks of the equity markets at all and you don’t like annuities, in many cases a bond portfolio will give you all you need, provided that your are in the green zone and don’t live beyond age 94.

Happy that I am in the Green zone!!! I have learned quite a lot from this book and only wish Mr. Otar would publish more of his knowledge as time changes some of his findings and viewpoints.

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Old 07-13-2012, 08:18 PM   #72
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I missed this thread but found Jim's book through LOL!'s post #18 in this thread:
http://www.early-retirement.org/foru...ent-61988.html

I shelled out the $5.99 and found it well worth it. The discussion about the equity to bonds ratio (its not critical) was eye opening and worth the cost of admission just for that section. I'm not a big fan of math and I admit there were many times I glossed over sections, but the way it was written really did seem to allow some skimming while still getting the general idea.

I read it on a Nook and much of the formatting of charts were lost so if your local library has it, you may prefer the hard copy format. The charts do look fine when I open the pdf on my computer though.
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