ESRBob, you've stated one side of this debate as well as any -- and I believe you've made some good points. However, there is another point of view.
The last thing I want to worry about when I retire is that my nestegg might implode due to a meltdown in the market -- something many commentators seem to think is quite possible. I believe a lot of retirees are similar to myself, i.e., they would opt for peace of mind over a higher rate of return.
I'm planning on retiring in about 18 months with a nestegg of roughly $1M in relatively liquid assets. About three years after I retire, I will be eligible for a modest pension of about $17k/year, and I am eligible for social security after that (say, another $10-12k/year). My wife and I are satisfied with a simple lifestyle and have always lived below our means. Neither of us would be characterized as "risk-takers."
Against this backdrop, we are seriously considering Mister Bill's game plan, i.e., putting a high percentage of our assets into TIPS. We can withdraw $25k/per year (adjusted for inflation) from our nestegg for 50 years. Why put our nestegg at risk in the market when TIPS will do the job AND allow us to enjoy a good night's sleep. Granted, even TIPS carry some risk, but if the U.S. Government defaults, I think we might all have something bigger than our nesteggs to worry about.
ZamaGuy
The last thing I want to worry about when I retire is that my nestegg might implode due to a meltdown in the market -- something many commentators seem to think is quite possible. I believe a lot of retirees are similar to myself, i.e., they would opt for peace of mind over a higher rate of return.
I'm planning on retiring in about 18 months with a nestegg of roughly $1M in relatively liquid assets. About three years after I retire, I will be eligible for a modest pension of about $17k/year, and I am eligible for social security after that (say, another $10-12k/year). My wife and I are satisfied with a simple lifestyle and have always lived below our means. Neither of us would be characterized as "risk-takers."
Against this backdrop, we are seriously considering Mister Bill's game plan, i.e., putting a high percentage of our assets into TIPS. We can withdraw $25k/per year (adjusted for inflation) from our nestegg for 50 years. Why put our nestegg at risk in the market when TIPS will do the job AND allow us to enjoy a good night's sleep. Granted, even TIPS carry some risk, but if the U.S. Government defaults, I think we might all have something bigger than our nesteggs to worry about.
ZamaGuy