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View Poll Results: Lowest equity allocation with 95%+ success as reported by retirement tools
0% 45 60.81%
1%-11% 4 5.41%
11% - 20% 5 6.76%
21% - 30% 5 6.76%
31%-40% 7 9.46%
41% - 50% 2 2.70%
50%+ 6 8.11%
Voters: 74. You may not vote on this poll

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Old 09-18-2023, 01:52 PM   #21
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Originally Posted by pb4uski View Post
0%

If I started SS today our WR, with very generous annual spending (more than we actually spend) would be 1.85%, so we can easily afford to avoid equities.

And I have recently. Not because I disfavor equities, but because I think they are overvalued and I don't "need" them. For the risk portion of my portfoio I delve into investment grade preferred stocks. If equities ever become reasonably priced then I'll reconsider them.
I respect @pb4uski, and I know this (side) topic is discussed from time to time.

I take the opposite tack. I invest "my" money (the 25x expenses I expect to need for my lifetime) 90/10 because that's the best survivability for my particulars in FIREcalc.

The money above that which I don't expect to need, conceptually I thin of as going to my kids in 30 years when I die. Given that 30 year time frame, I invest 100% of "their" money in stocks.

The average of the two is about 98%, which is where my AA is now. I review and update things periodically but it doesn't move much.
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Old 09-18-2023, 01:56 PM   #22
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Originally Posted by SecondCor521 View Post
I respect @pb4uski, and I know this (side) topic is discussed from time to time.

I take the opposite tack. I invest "my" money (the 25x expenses I expect to need for my lifetime) 90/10 because that's the best survivability for my particulars in FIREcalc.

The money above that which I don't expect to need, conceptually I thin of as going to my kids in 30 years when I die. Given that 30 year time frame, I invest 100% of "their" money in stocks.

The average of the two is about 98%, which is where my AA is now. I review and update things periodically but it doesn't move much.
And that makes sense when there is a clear purpose for funds way down the road. For my wife and I we have no kids. Charities will get the leftovers. So we will spend it or someone else will. Leaning more fixed income, though we still have seven figures of equity exposure, just makes things fairly predictable and frankly, easy for us.
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Old 09-18-2023, 02:21 PM   #23
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And that makes sense when there is a clear purpose for funds way down the road. For my wife and I we have no kids. Charities will get the leftovers. So we will spend it or someone else will. Leaning more fixed income, though we still have seven figures of equity exposure, just makes things fairly predictable and frankly, easy for us.
Yeah, forgot to mention in my previous post that legacy plans - and kids/no kids can definitely affect that - can play a huge part in how one looks at the topic.

Although I have kids, there is a variation of your rule for me: "Fly first class or else my kids will" ;-)
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Old 09-18-2023, 02:38 PM   #24
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I think you are not understanding the question and maybe that is my fault. I thought it was clear. It is essentially who doesn’t need equities to have a great retirement.
And the answer is:

Anyone with a low enough WR (from the portfolio). That's all there is. You are making it complicated.

-ERD50
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Old 09-18-2023, 03:18 PM   #25
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0% equities needed so will likely go 100% equities (after age 65 or so).
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Old 09-18-2023, 03:21 PM   #26
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zero, like I have now.
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Old 09-18-2023, 03:37 PM   #27
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Originally Posted by SecondCor521 View Post

Although I have kids, there is a variation of your rule for me: "Fly first class or else my kids will" ;-)
Thatís the plan.
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Old 09-18-2023, 03:37 PM   #28
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And the answer is:

Anyone with a low enough WR (from the portfolio). That's all there is. You are making it complicated.

-ERD50
Sorta think you are, but I will leave it there.
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Old 09-18-2023, 04:34 PM   #29
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Isn't the average real return on bonds ~ 2%, so if you have a portfolio of 25x spending and SS is ~ 50% of your spending then you can have 0% equities and have a 4% withdrawal? The main difference would be the terminal value and maybe an inflationary environment for far longer than anything we have seen to date. If you only have 25x your non SS/pension income then I would think you have shortfalls without equities. I guess another way to look at it is if you can convert your savings into a SPIA and cover your bills you don't need equities, but again may have significant inflation risk.

I think the more interesting question is how low of a % of equities can you use to get 25x your expenses and how long does it take vs. not using equities.
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Old 09-18-2023, 04:48 PM   #30
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Old 09-18-2023, 04:51 PM   #31
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I will reiterate the question because it seems something simple is being made complex.

I am not asking the question for answer about me. My personal answer is 0%. I am asking, you as an individual or family, how much do you require in equities in your allocation to make your plan work for you over whatever time frame and expenses you have. Many respondents seem to understand the straight forward question.

My hypothesis is that many, and the results are showing this, on here can live without an equity allocation and be perfectly fine.
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Old 09-18-2023, 07:02 PM   #32
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Originally Posted by COcheesehead View Post
I will reiterate the question because it seems something simple is being made complex.

I am not asking the question for answer about me. My personal answer is 0%. I am asking, you as an individual or family, how much do you require in equities in your allocation to make your plan work for you over whatever time frame and expenses you have. Many respondents seem to understand the straight forward question.

My hypothesis is that many, and the results are showing this, on here can live without an equity allocation and be perfectly fine.
K. Then for my plan I need at least 50% equities, but it thinks 60% is optimal.

For your hypothesis, anyone who needs less than a 2.84% withdrawal does not need equities if they use 30 yr Treasuries and trust the algebra. It is interesting to note that the withdrawal rate is .4% lower 2.43% if you use the data from 1927 vs. 1871 so the real return on bonds has shrunk over time. I would imagine that a large % of people on this board need < 2.5% withdrawal rate after claiming SS.
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Old 09-18-2023, 07:26 PM   #33
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I donít need equities, but I have them anyway.
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Old 09-18-2023, 07:47 PM   #34
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In the simplest version, where bonds just returned inflation (say they were I-bonds), then anyone where 1/WR exceeds life expectancy doesn't need any bonds. (So a 3.33% WR and 30 year planning horizon is golden). With long TIPS around 2%, a 30 year SWR can be around 4.5%. That means many folks here could use bonds-only if they chose to do so.

We choose to continue with our 80/20 allocation though.
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Old 09-18-2023, 07:55 PM   #35
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Old 09-18-2023, 08:12 PM   #36
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Originally Posted by COcheesehead View Post
I will reiterate the question because it seems something simple is being made complex.

I am not asking the question for answer about me. My personal answer is 0%. I am asking, you as an individual or family, how much do you require in equities in your allocation to make your plan work for you over whatever time frame and expenses you have. Many respondents seem to understand the straight forward question.

My hypothesis is that many, and the results are showing this, on here can live without an equity allocation and be perfectly fine.
That's quite true.
But one of my goals in life is to become a Wealthy B*stard to a degree.
And that's not gonna happen by owning only fixed income investments...
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Old 09-18-2023, 08:15 PM   #37
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That's quite true.
But one of my goals in life is to become a Wealthy B*stard to a degree.
And that's not gonna happen by owning only fixed income investments...
But if you ever get to be that wealthy - like some on here - fixed income looks pretty attractive. It’s called winning the game. 78% of the respondents agree.
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Old 09-18-2023, 08:25 PM   #38
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But if you ever get to be that wealthy - like some on here - fixed income looks pretty attractive. It’s called winning the game. 78% of the respondents agree.
How do you come to that?

78% of respondents said it was possible to go to zero equities. That doesn't mean that it looks attractive to them, and that is what they are doing, does it? Just that it is possible (per the calculators).

-ERD50
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Old 09-18-2023, 09:03 PM   #39
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How do you come to that?

78% of respondents said it was possible to go to zero equities. That doesn't mean that it looks attractive to them, and that is what they are doing, does it? Just that it is possible (per the calculators).

-ERD50
Indeed. I said and voted that it was possible for me to go to zero equities and succeed. I am, in fact, at 98% equities.
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Old 09-18-2023, 09:45 PM   #40
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Yes, I voted 0% because the retirement calculator gave me 100% success at 0% equities. However, I am currently at 63% equities and have no intention of ever going to 0% equities.
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