Interesting webpage on AA

[ERD50]

You don't know everyone's situation. Firecalc shows I have a 100% success rate for a 40 year period using a conservative AA approach, so I'm satisfied. And I'm not even plugging in SS income. I guess I'm lucky enough to have a large enough portfolio to accommodate my modest lifestyle.

If I had to go with a 70/30 AA for FC to give me a 100% success rate, I can assure you I wouldn't have retired early.

Sure, if the portfolio is large enough at the start it can work out. That's not an option for most. Of course, with that large of a starting point, the volatility of a 100% EQ AA wouldn't be a problem either.

So that's fine - I just cringe a little when people talk about using large fixed income % AAs to reduce 'risk'. It's not really the case, as least as far as FIRECALC points out. I'd guess that it's not the AA that's getting you to 100% success, but the (relatively) large starting point.

But that gives you options, and options are good! And you found one you are comfortable with. All is well.

-ERD50

 

[Huston55]

So that's fine - I just cringe a little when people talk about using large fixed income % AAs to reduce 'risk'. It's not really the case, as least as far as FIRECALC points out. I'd guess that it's not the AA that's getting you to 100% success, but the (relatively) large starting point.

You don't know everyone's situation. Firecalc shows I have a 100% success rate for a 40 year period using a conservative AA approach, so I'm satisfied. And I'm not even plugging in SS income. I guess I'm lucky enough to have a large enough portfolio to accommodate my modest lifestyle.

If I had to go with a 70/30 AA for FC to give me a 100% success rate, I can assure you I wouldn't have retired early.

So, it could be large portfolio or modest spending or, a combination of both relative to one another (that's how my Grandmother lived on her own for 40 yrs).

Everyone has to find their own path, and it seems Dawg's found his. Even though others in the same circumstances would have retired earlier with a more heavily equity weighted AA.

 

[mathjak107]

i have never been a fan of aged based investing at all.

telling a 25 year old he should go 100% equities when he gets scared and jumps ship at every dowturn losing money is wrong..

telling a 65 year old who has a pension that meets his needs and still has long term money he wont touch for 30 years that he has to cut equity exposure is wrong too.
number one criteria should be pucker factor not age.

what brokerages need is not age based criteria but better pucker factor profiling .

a few research companies are offering very comprehensive questionaires to determine risk level and a few investment companies are using them but most don't want to pay the fees for them.2008-2009 showed wall street just what risk meant to many people and age was not a boundery.

even the target funds will learn they have it wrong. loading retirees up on bonds based on age and not by whats happening in the world is wrong.

the risk of being put mostly into bond funds at this point in time because of age may be setting retirees up for a bad drop when longer term rates rise.

it only worked until now because of a 30 year bull market in bonds.