Those Who Don't Have Pensions.............

[FinanceDude]

What kind of investments are you doing to make sure you don't outlive your money? (Besides LBYM)

A lot of folks on here have military or govt pension, that's going to help a ton.

However, I think about 80% of all Americans will not have a pension........

Just curious............

[unclemick]

psssst! - Dividends.

heh heh heh

[bbuzzard]

The same kind of investments that the pensions make to make sure that their pensioners do not run out of pension fund before they die. Broadly diversified investments in the total market.

edit (typo - their not than)

[Dawg52]

Dividends, interest & social security should take care of my cash flow needs. Maintain a balanced portfolio and I should be fine for the long haul. Lot's of previous post here on this topic.

[FinanceDude]

Quote:

Originally Posted by unclemick2 psssst! - Dividends. heh heh heh

SO, load up on P&G and go fishing?? *

[FinanceDude]

Quote:

Originally Posted by DOG52 Dividends, interest & social security should take care of my cash flow needs. Maintain a balanced portfolio and I should be fine for the long haul. Lot's of previous post here on this topic.

Well, I am new here........... What about taxes?

[bbuzzard]

Oh, one difference. I am not FORCED by a corrupt board of directors and management to load up on my employers stock in my retirement portfolio.

[REWahoo]

Quote:

Originally Posted by FinanceDude What kind of investments are you doing to make sure you don't outlive your money? (Besides LBYM)

FD, just in case you don't get a lot of 'quality' responses to your question, you might want to take a look at some of the threads on this board to get an idea. (Hint: it's all over the place, from active real estate investing to traditional asset allocation to buying futures in certain types of exotic cheeses. )

http://early-retirement.org/forums/index.php?board=6.0

[Dawg52]

Quote:

Originally Posted by FinanceDude Well, I am new here...........* What about taxes?*

I recommend paying them. * *Lot's depend of your personal situation. You may need munis to lower your tax base. There are several on here more qualified than me that can give you more specific advise. They will probably need a little more info on you though.

[brewer12345]

Quote:

Originally Posted by REWahoo! FD, just in case you don't get a lot of 'quality' responses to your question, you might want to take a look at some of the threads on this board to get an idea.* (Hint: it's all over the place, from active real estate investing to traditional asset allocation to buying futures in certain types of exotic cheeses. ) http://early-retirement.org/forums/index.php?board=6.0

You forgot the ever popular "sponging off a working spouse" and the JG special "pulling it out of my @ss."

[eridanus]

Annuities.



Just kidding. The Trinity Study is a good place to start.

[REWahoo]

Quote:

Originally Posted by brewer12345 You forgot the ever popular "sponging off a working spouse" and the JG special "pulling it out of my @ss."

I thought JG's portfolio consisted of a combination of the two...plus $100k in 0% interest CC debt! :P

[brewer12345]

Hint to finance dude: play with firecalc for a bit.

[unclemick]

Hmmm

The irritating thing is that it's so simple:

1. Buy the Target Retirement Series appropriate for your age

or:

2. Buy some pssst Wellesley

Go fishing, post here a lot, or whatever floats your* boat.

Male hormones require we make it complicated though - putzing is pretty much incurible. Trust me.

heh heh heh heh heh heh heh heh

[Mwsinron]

We may as not have a pension. It will be 10800 a year non inflation protected. It wont take long for inflation to make it semi-worthless.

[Jane_Doe]

Finace Guy - I know you introduced yourself here:

http://early-retirement.org/forums/i...p?topic=8930.0

However, when you started this topic and asked this question, it would have been good of you to mention that you are trying to pick people's brains as to their strategies for surviving in early retirement, and are trying to get insights to help your clients. This is corrrect, yes?

While people don't mind helping out, you really need to dive in and read, read, read a lot of the older posts on this board. There is a HUGE amount of information and discussions on how every one handles their own situation.

Good luck,

Jane

[FinanceDude]

Thanks for the help.............

[Nords]

Quote:

Originally Posted by Jane_Doe While people don't mind helping out, you really need to dive in and read, read, read a lot of the older posts on this board.* There is a HUGE amount of information and discussions on how every one handles their own situation.

Yeah, like anyone listens to that when we keep looking up things for them. I feel your pain, Jane...

Quote:

Originally Posted by FinanceDude What kind of investments are you doing to make sure you don't outlive your money? (Besides LBYM) A lot of folks on here have military or govt pension, that's going to help a ton. However, I think about 80% of all Americans will not have a pension........

I've said it before: if you want a lifetime COLA pension then go buy yourself an annuity with those features. It's not a club with a closed membership. I wouldn't recommend the military method of obtaining one of them, so don't envy those of us who joined the military just because it looked like a fun challenge. We didn't join for the pension either, and if I had to do it all over again I would've chosed the Warren Buffett method.

Trinity's 4% SWR method assumes that there will be some consumption of principal and that hopefully past is prologue. That means you'll need 25x assets above your initial annual expenses and you'll probably die before your principal is gone.

However ESRBob's 4% SWR/95% rule ensures that you'll always have something left in your portfolio. An unusually severe bear market may require part-time work or a temp job to get over the nastiest patches, but that's why his book says "Work Less" instead of "Don't Work". As long as you're capable of some sort of work, this approach is free of failure.

For the "Don't Touch The Principal!!" route, living off dividends may require as much as 33x assets. It's a little difficult to tell people that they could retire in their 40s via Bob's part-time option, in their 50s with the Trinity study, or in their 60s if they wanted an extra 33% in their portfolio to ensure sufficient dividend income-- "So hang in there another decade or two, folks, and wait until you can collect those dividends!!". And if the govt messes with the current very generous taxation of dividends then dividend ERs may be screwed. Of course one's dividends would have to be high enough to also pay taxes, just like FIRECalc spits out its results in before-tax dollar amounts.

It's also difficult to tell clients people to read up on euthanasia, but that's one sure-fire way to ensure you don't outlive your assets.

Since ERs face a potential retirement of seven or eight decades, I feel that the primary concern should be inflation while volatility is irrelevant over that time span. According to Dimson & Marsh, the only investment to regularly beat inflation over the last century has been stocks. So our retirement portfolio is over 90% stocks, tilted toward small-cap, value, & international, with the remainder in cash (MM or CDs). No bonds.

But for those who absolutely positively don't want to outlive their money, their only "guaranteed" solution is an annuity with a COLA-- for which peace of mind they will pay dearly. It'll almost certainly require more than 33x expenses...

[Rich_by_the_Bay]

Quote:

Originally Posted by Nords But for those who absolutely positively don't want to outlive their money, their only "guaranteed" solution is an annuity with a COLA-- for which peace of mind they will pay dearly. It'll almost certainly require more than 33x expenses...

Nords' post should go in the archives as one of the best summaries of retirement strategies I've read here.

[AltaRed]

Quote:

Originally Posted by Rich_in_Tampa Nords' post should go in the archives as one of the best summaries of retirement strategies I've read here.

Well said until his 2nd last paragraph which is flawed because he doesn't disclose an existence of a healthy pension to justify a 90% stock portfolio.