Originally Posted by DSOs
That’s right. What you’re missing is that they were dubiously told there is no pucker factor
as long as you keep contributing & stay the course. Some of the people who “bailed out” in 2008 either needed the money, were in over their heads, &/or realized that they were misled (lost trust).
I see; more guaranteed, free lunch talk.
Question: How long will it take until HFT infiltrates/crowds out the lazy
, careful, strategic investor? IMO, the Market apparatus will be charging high fees for EVERYONE soon enough.
Something else I don’t get: Why do you guys feel that the withdrawal stage deserves mega-attention, & the accumulation stage doesn’t? At least during the withdrawal stage you have rock solid data that allows you to adjust with pin-point accuracy—in other words you have control. You can’t control reliably/accurately
during the accumulating stage; unless of course the market is rigged in your favor, or you have a guardian angel.
retirement planning is a subject very near and dear to my heart and i spend a lot of time learning,studying and working on my own final plan as we ready for retirement now.
let me enlighten you as to the differences between accumulation and decumulation as well as your pin point accuracy comment.
heres what your missing about decumulation vs accmulation.
while studies like the trinity study gave us an idea about how long our money should last using a particular allocation and withdrawl rate its all based on theoretical historical markets happening again and inflation being what it was .
here is the issues ,the biggest being we have been living the 10% failure rate the studies refer to for the last 12 years.that may immediately destroy any data of the past making it outdated going forward.
the latest data for the trinity study was updated in 2011 and that really only tells us how those fared who retired 30 years ago since 30 year chunks of time are studied. those time frames had little in common to what we have been seeing for more than a decade.
here is the difference between accumulation and decumulation.
the order of the gains and losses during accumulatation doesnt matter at all. an 8% annual average return over long periods of time is the same no matter the order they come in.
decumulation is a different animal all together. the order those market gains and losses come in are crucial to your portfolio living or dying .
taking withdrawals and getting hit with a string of down years early on is death to a retirement plan.
want a startling example?
the period from 1987 to 2003 the markets had 17 incredible years. the markets averaged 13.4%. thats what you saw if you were in your accumulation stage.
for those spending down the results would have varied over that time by a huge amount.
the 4% safe withdrawal theory comes from a 50/50 mix averaging about 7% with 3% inflation.
your leave 3% with the nest egg to account for inflation and your free to withdraw everything else.
well inflation ran 4% during 1987 to 2003 so leaving 4% with the house and withdrawing everything over that had some amazing results just based on playing with the order of those gains and losses over that period.
starting out with 100k the balance during the greatest bull market ever varied from a positive 76,629 left to A NEGATIVE 187,606 .00 at the end of the 17 years just by doing nothing more than playing with the order those gains and losses came in..
IS THAT INCREDIBLE OR WHAT.
a difference ranging from +76,000 to a minus 188,000 just by changing the order those gains and losses came in.
thats why the accumulation stage is a piece of cake to deal with,spending down is far more complex.
to someone spending down getting caught in a downturn and selling at a loss is like a trader having a string of losses early on. that money is gone forever even if markets recover.
thats why its imperitive to have a spending plan that avoids having you ever selling into a loss.
planners are a dime a dozen who can help you in the accumulation stage. i know very very few who i would call experts at the decumulation stage planning level