Originally Posted by Lovely Rita
Now, FIRECALC, says “whoa there, girl! Waddya think you’re doin’?” And I am brought up ‘short’, apparently.
First HUGE question: My AA is 50/50 because I was TOLD it needed to be more conservative, because I am within 3 years of retirement. But if it needs to MORE aggressive, because it will not tolerate the legendary 4% SWR at 50/50, isn’t this some huge “Catch 22”? Try telling the average investing mavens that you are within 3 years of retirement, and your AA is 75/25. They’ll walk away shaking their heads.
I can get FIRECalc to support 4% SWR at 100% certainty with 40yr payout, with a
60/40 AA. The main requirement is to select the "mixed portfolio" in the "How Is It
Invested ?" tab of Advanced FIRECalc. Asset allocation is:
large value 25%, S&P500 25%, US smallcap 10%
LT treasury 15%, LT corporate bond 15%, 1-month treasury 10%
It's still pretty conservative because there is 0% foreign. Unfortunately lots of
people think it's "data mining" because there is not data available as far back in time
as for the "total market" choice and thus some pessimistic scenarios are avoided.
Now, my eccentric habit of behaving like SS will not exist is because I want to retire at 56, and do not want to feel like I should only compute my needs to the earliest possible date for SS, at the risk of taking reduced benefits when I do not have to. (If that makes any sense at all.)
As I explained in my post in the other thread (talking about a 10-year "period certain"
annuity to stand in for SS until it starts), you do not need to assume you'll take SS at
the earliest possible age or that it's not gonna get eroded a bit from what you're told
to expect now.