Lsbcal
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Believe it or not, I can actually follow ERD50's and Audrey's treatment of their portfolios. Seems to me very fine points of differences. I'm not feeling misled at all.
Is that why you are just shown in silhouette?On the thread about portfolio return YTD, there are posters who say "this account of mine has wonderful return of so and so". Well, owning individual stocks, I can always point to some stocks where I double my money, while neglecting the ones where I lost my shirt.
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I have that big pile of cash, and it is included in Quicken. Even the cash in my checking account is included (used to be in the mid 5 figures). And my total return always includes the effect of the meager yield of all that cash.
But let's all remember that the 4% "rule" is a guideline, not set as an actual fact.
How do you get a Quicken return report to include your cash accounts? I have not been able to get Quicken to include my cash accounts in the performance report so I have to add them manually.
Many of the studies work the other way - they ask how do much you want to withdraw (including taxes you will have to pay) and then tell you how large of a retirement portfolio you need to support that annual income given a 30 year retirement based on the Trinity rules or whatever.First, I didn't say (and my example showed this), that all accounts are subject to the same AA. I showed that one should sum all their investible assets, and the look at the total AA in order to see the big picture.
As far as it not being stated - I think it is such a basic concept that it is accepted by default. Look at this from firecalc.com:
It doesn't say anything about a segment of your finances, to see how that segment would do. Your net worth is your whole nut.
OK, for simplicity, you could pull out a known amount for a known upcoming expense, like college education - and then take a look at the portfolio going forward without either the funds or the expense. That's no different from entering it as cash, and entering the expense later, but that's more entries in firecalc.
But that's different from an ongoing strategy of pulling excess based on market returns, taking it out of the equation, and then spending that accumulation on various things in various years, and trying to discuss this in terms of the standard inflation adjusted withdrawals and 'portfolio survival'. Again, not that there's anything wrong with that approach, but as far as making comparisons to how firecalc works, and all those terms, well, it just isn't a part of how it works.
For example, you could have pulled an excess for many years and set it aside, but never got excited about any big purchase, so it just sits there. Then let's say the market melts down and your 'compartmentalized portfolio' fails, but then you 'refill' from your off-the-books stash.
Did your portfolio (the whole nut) actually fail? I'd say no, but I think you would say yes. This is why I say it is confusing. A big picture view has no such uncertainty in terms.
-ERD50
I treat the college fund as part of my portfolio, but the withdrawals are booked as future liabilities, same as car purchases.What about funds set aside for children's college? What about funds set aside of other things but not retirement such as saving for a new car or house down payment...
After being retired for 6 years, I received an inheritance. I added it to my investable assets and recalculated my WR. Then we lowered our need for withdrawals by living in a low cost place for 5+ months a year.It depends if you are talking about the success/failure of that particular pool of money. But that is not the same as the success/failure of the retiree, who depends on his/her entire portfolio...
Again net worth is a totally different animal that investable assets. Yes we could turn real estate into an investable asset but until we do, it is a lifestyle expense.Mine happens to include every bit of cash. Well, not the loose coins in the ashtray of my car, or the few dollar bills in my wallet, but everything else is on that Quicken screen. Quicken also immediately subtracts out any charges that I make with my credit cards, my HD and Lowe's cards, and it reminds me that I am that much poorer. I like it.
Every so often, people ask about net worth on this forum, and I am among the people who do not count the value of their home(s). No, it's not on Quicken...
RE is definitely not investable asset, unless it is for rental. It's just a money pit. However, it is definitely "spendable" asset in dire situations. I keep that in the back of my mind, but do not have it in Quicken or any spreadsheet....Again net worth is a totally different animal that investable assets. Yes we could turn real estate into an investable asset but until we do, it is a lifestyle expense.
The problem with returning unspent funds to the retirement portfolio, is that none of the models work that way. They assume once your withdrawal is withdrawn, that's it - it's never returned.
If you do return unspent funds - your actual withdraw rate for a that year was lower than you calculated when you made your initial decision. Now you don't have a fixed withdrawal amount or rate anymore - it's jumping up and down depending on whether you spent all your income or not. The model goes out the window.
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The model goes out the window.
The models can still help you decide whether to cut your spending and/or lower your withdrawal rate, or increase them. Or what the effects might be if you change your asset allocation. Or if you decide to pull a chunk of money out for a one-time large purchase, how the resulting projected income might change.I could care less if "the model goes out the window", I only care about how much dough I have and how fast I'm spending it.
These calculators are good for giving you a warm fuzzy before you retire but after?
You are on your own, the die is cast. No model is ever going to put more dough in your account or cut your spending, improve the market, lower inflation or keep you out of the hospital.
You are on your own, the die is cast. No model is ever going to put more dough in your account or cut your spending, improve the market, lower inflation or keep you out of the hospital.
I like this description very much. If I have a spending rate that is comfortable, I am strongly inclined to maintain a lifestyle I have become accustomed to. If I see I have more portfolio than I really need, I can of course add expenses a bit at a time, but I would much prefer to know that some "mad money" is available for a big purchase from time to time (maybe a once in a lifetime trip, for example). I don't want to change my regular month-in-month-out expenses. But I want to stay within the plan for safe expenses even with occasional big purchases. This method gives me a very intuitive way to do that.At year end I subtract the unspent amount from the total portfolio on my spreadsheet and add it to the "mad money cell (which I have just adjusted up or down based on the past year's performance).
No model is ever going to put more dough in your account or cut your spending, improve the market, lower inflation or keep you out of the hospital.
The speedometer on that cycle of yours is not going to tell you to speed up or slow down but it's a good thing to know how fast you're going.![]()