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bottom line is it can't compute because it is not what is is designed for .. it is telling you with gibberish you don't have what it takes to give you a success rate because none exists without a portfolio ,.you may be seeking an answer to your question but portfolio success rate is not what that answer is about..
it is like using a hammer when you really need a different tool for the job .. your question has nothing to do with portfolio success rate in your plan so this is the wrong tool.
just playing around with firecalc i could not get any sensible answer out of it using just pension and ss with zero in a portfolio
Last edited by mathjak107; 06-30-2019 at 01:41 PM..
Even retirement money at age 62-65 has money that likely won’t be used to eat for 25-30 years . That money for most should be and needs to be in equities.......diversified or index funds are fine ...just rebalance when things get to far out of whack or cash needs to be refilled
Even retirement money at age 62-65 has money that likely won’t be used to eat for 25-30 years . That money for most should be and needs to be in equities.......diversified or index funds are fine ...just rebalance when things get to far out of whack or cash needs to be refilled
Most retirees will need their retirement money to eat. How many stories here on CD do we hear of folks not recovering from the circa 2008 downturn? They did not adjust when the bottom fell out.
Most retirees will need their retirement money to eat. How many stories here on CD do we hear of folks not recovering from the circa 2008 downturn? They did not adjust when the bottom fell out.
The only stories we hear are the ones caused by their own poor investor behavior not markets .. markets were greatly recovered by 2009 pretty much ,so unless you did the wrong thing it was a non event .
But it makes a good story for the uninformed who don’t know facts .
..for anyone looking to draw at least 4% inflation adjusted from the portfolio they need at least 40% equities as a minimum or they risk a high rate of failure.. this is basic stuff..
If you don’t want to own equities, great , but don’t parrot misinformation
I have a friend who retired in 2000. It went well until the mortgage crisis meltdown.
He had planned to sell his portfolio as it went up; didn't have much cash because he wanted all his money working for him.
We all know what happened .... he was forced to sell as the market retreated sharply. Forced because he needed the money. His company had paid him off with an early retirement; he was too young for Social Security, but thought he had plenty of money to see him through. It SOUNDED like enough!
He is not out of money, but retirement is not what he thought it would be.
Best you can do, I think, is work until you begin drawing Social Security, get your house and cars paid for, keep many, many months worth of cash in things like DC, money markets, and T-Bills and try to invest what you can.
I have a friend who retired in 2000. It went well until the mortgage crisis meltdown.
He had planned to sell his portfolio as it went up; didn't have much cash because he wanted all his money working for him.
We all know what happened .... he was forced to sell as the market retreated sharply. Forced because he needed the money. His company had paid him off with an early retirement; he was too young for Social Security, but thought he had plenty of money to see him through. It SOUNDED like enough!
He is not out of money, but retirement is not what he thought it would be.
Best you can do, I think, is work until you begin drawing Social Security, get your house and cars paid for, keep many, many months worth of cash in things like DC, money markets, and T-Bills and try to invest what you can.
Sounds like poor planning not markets .. while he actually would have turned out fine since 2000 even drawing down with 100% equities, if he was a100% equities in retirement it was a mistake..... had he had a more conventional 60/40 , 40/60 ,50/50 he would not have been selling equities he would have been selling bonds ...
But let me just say this , the years leading up to 2000 if he was 100% equities saw 17 years of 14% returns . His balance would have been way way higher then had he had a 50/50 so this story too has some fear mongering and molding to it vs his real outcome likely ...his balance would have been likely higher in 2000 after the drop if he was in diversified funds and did not do it to himself by speculating in dot coms .
So like I say these stories sound like good story lines but there usually is more to them.. usually the twist is the time frames leading in with those allocations were above average and balances when the drop comes are actually still higher than had they been more conservative...
Looking at the 119 30 year retirement cycles to date through wars ,depressions and crashes shows 100% equities to do exactly that and the retirement is barely effected .... 100% equities failed to last 8 of the 119 time frames while 50/50 failed 6 ... not even enough difference to really consider.
I am not saying retirees should be 100% equities but I am saying the usual anti investing rhetoric spewed here by those who fear equities is just fear mongering with no basis in facts or data except for the silly stories with only a piece of the story that gets parroted that usually makes a good story if you don’t let facts get in the way
Last edited by mathjak107; 06-30-2019 at 04:49 PM..
About even with inflation...although I expect inflation to come down as the economy slows.
Better than nothing and better than zero......
If one has "the right amount" - or close to it, they need to follow "the right advice" to make sure they have living...and "end time" financing, but if one is either way above or well below "the number" they have to take a different outlook based on where we are now.
Just as engineers design things for 2X or 4X the stress, so should a proper retirement be. Treading right on that line means a shock can make the elevator or bridge fall down prematurely.
When I was starting out in investing it was "good as gold" that anyone could make 7% in a CD or on a T-Bill. It was never considered that Mortgage rates could fall below about 10%, making even mortgage securities a decent investment at about 9-11%.
Those who planned to save money and ladder in each year to such investments have found themselves way short.....which is quite evident in the Pension funds (which are exactly like a personal portfolio, just larger and more visible)...
To go back to the thread premise, we are living quite high on the hog since we are still at least 50% invested in equities which are performing, so we don't need to draw down any principal even 15 years after our early retirement. I am taking money from the IRA just so I don't have as big of a Required Minimum Withdraw in 5 years when I get to that age! I should probably take more.....but only 1/3 of our money is in the IRA. One way or other, Uncle Sam is going to get his piece of that!
Given anything other than a total meltdown, I don't see us eating too far into our principal until perhaps near "the end" if we desire a really top end AL or super-duty home-care crew and setup.
Our financial view are inherited - my dad was religious about "never touching the principal" and he is still alive (late 80's) and never has. If he could buy the Fountain of Youth he'd break into it, but being as that's not an option I think he will pass away with a large bank balance.
I think my wife and I would act the same whether "our number" was 600K or 5M. We'd figure out a way to have it not drop from where it was...short of something crazy that we could buy like the health of ourselves or our children.
Most everyone I know has most of their retirement money in target funds or balanced mutual funds. A significant amount of these investments is in the stock market. They withdraw their money once a year.
What should they do if the stock market crashes in the months before their annual withdrawal?
Do you have enough cash, money market or bond fund money set aside in separate accounts to cover your expenses in retirement while you wait for the stock market to recover? How much would the stock market have to fall before you access your bonds or money market funds instead of your mutual funds/ETF's that have stock market exposure?
I am not rich nor do I gloom and doom. Just try to plan most likely and not panic.
As such, if there is a Huge Bear Market, I will adjust spending and try to live on what I have minimizing what I might take from the market if any. If it is a Gentle Recession, I will adjust spending and try to live on what I have minimizing what I might take from the market. If that Bear/Recession is when I have to take RMDs, I will take them as seems best.
Bottom line, I lived through the Great Recession of 2008, the housing market bubble of 2006 and the housing market crash of 2007/8 in Florida where it was bad and it was horrible to see. After that it is easier to face whatever downturns come.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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Quote:
Originally Posted by #127
I am not saying retirees should be 100% equities but I am saying the usual anti investing rhetoric spewed here by those who fear equities is just fear mongering with no basis in facts or data except for the silly stories with only a piece of the story that gets parroted that usually makes a good story if you don’t let facts get in the way
The facts never got in the way for us. Life's predictable unpredictability happens to everyone.
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