Thurman...All Weather Retirement Portfolio

[Lemonade]

Is anyone familiar with this book?

Randy Thurman presents a 6 fund portfolio which allows for 5.5% withdrawls for 40 yrs with a 96% success rate (backtested to 1930, and with the caveat that future timeframes may not reflect past, etc.) Only two starting periods, 1937 and 1969, keep his recommended fund classes/ratios from backtesting at 100% over ALL 40 yr time periods. And eliminating inflation adjustments for the first 8 years of retirement (if portfolio falls by 25%) brings success up to 100%, even including the timeframes which begin in '37 and '69.

It's a quick read and another point of reference for those still determining their AA heading into or already at retirement.

 

[razztazz]

Only two starting periods, 1937 and 1969, keep his recommended fund classes/ratios from backtesting at 100% over ALL 40 yr time periods. And eliminating inflation adjustments for the first 8 years of retirement (if portfolio falls by 25%) brings success up to 100%, even including the timeframes which begin in '37 and '69.

Not sure I want to invest the time spelunking but I'm wondering if that (the bold face) wouldn't also cause a 50-50% AA of SPY & MMF to do the same?

I went to his web site and looked at his investments. Seemed like more complications e.g small cap this, value/blend that, international something yadda yadda. Every time I see ideas like this, while I cannot say I am outright against them, they just seem like a lot of "gilding the lily." Whatever they seem to be doing can probably be done by just moving the slider on the meat-and-potatoes asset allocations or adding a little gold or TIPS or something.

And btw, not increasing withdrawals for inflation for 8 years might sound like just the ticket until you actually retire and have to do it. Especially if you retire into a theoretical future 1966, 1967...

 

[Koolau]

Looking back over 20 years, It's clear to me that we could have taken 5.5% every year and been okay. In fact, the first 2 or 3 years, we did take even more than 5.5%.

We didn't have a particularly complicated AA and we didn't have near the equities % that most plans have. Still we would have been fine - and we lived through 2008 just fine.

The 4% rule (or similar) is more or less "as guaranteed to w*rk" as is possible. Bumping to 5.5% with the same AA is likely to w*rk all but the one or two black swan starting years in any typical 30 year period.

Adding the complication of the RT "system" would likely make me just quit. I'm more of the "couch potato" asset allocation myself. YMMV