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Old 06-29-2019, 07:24 AM
 
Location: SoCal
13,202 posts, read 6,308,074 times
Reputation: 9815

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From what I’ve seen higher equity ratio doesn’t necessarily mean higher balance. Looking at people who posted their returns for 1 year, it’s still negative. June to June. Even though this year YTD returns have been spectacular.
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Old 06-29-2019, 08:01 AM
 
71,490 posts, read 71,674,131 times
Reputation: 49074
Quote:
Originally Posted by NewbieHere View Post
From what I’ve seen higher equity ratio doesn’t necessarily mean higher balance. Looking at people who posted their returns for 1 year, it’s still negative. June to June. Even though this year YTD returns have been spectacular.
over long periods of time like typical accumulation periods and retirement periods which span decades it generally leads to higher balances ..

the average balance over 119 retirement cycles is higher with 100% equities .

here is 100% equities , 75% , 60% and 50% and to show how risky to little equities can be here is 30% too , as well as fixed income only . under 90% success rate is considered to risky and unsafe
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100% equities

FIRECalc Results
Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.

FIRECalc looked at the 119 possible 30 year periods in the available data, starting with a portfolio of $1,000,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 119 cycles. The lowest and highest portfolio balance at the end of your retirement was $-931,017 to $8,509,297, with an average at the end of $2,718,768. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 8 cycles failed, for a success rate of 93.3%.
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75% equities

FIRECalc Results
Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.

FIRECalc looked at the 119 possible 30 year periods in the available data, starting with a portfolio of $1,000,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 119 cycles. The lowest and highest portfolio balance at the end of your retirement was $-400,986 to $5,679,475, with an average at the end of $1,867,416. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 6 cycles failed, for a success rate of 95.0%.
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60% equities


FIRECalc Results
Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.

FIRECalc looked at the 119 possible 30 year periods in the available data, starting with a portfolio of $1,000,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 119 cycles. The lowest and highest portfolio balance at the end of your retirement was $-272,474 to $4,564,899, with an average at the end of $1,416,984. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 5 cycles failed, for a success rate of 95.8%.



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50% equities

FIRECalc Results
Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.

FIRECalc looked at the 119 possible 30 year periods in the available data, starting with a portfolio of $1,000,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 119 cycles. The lowest and highest portfolio balance at the end of your retirement was $-223,952 to $4,145,063, with an average at the end of $1,146,780. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 6 cycles failed, for a success rate of 95.0%

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30% equities


FIRECalc Results
Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.

FIRECalc looked at the 119 possible 30 year periods in the available data, starting with a portfolio of $1,000,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 119 cycles. The lowest and highest portfolio balance at the end of your retirement was $-206,630 to $3,368,918, with an average at the end of $683,110. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 15 cycles failed, for a success rate of 87.4%

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fixed income only is about as risky as you can get at 4% ...it has failed over and over and over

FIRECalc Results
Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.

FIRECalc looked at the 119 possible 30 year periods in the available data, starting with a portfolio of $1,000,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 119 cycles. The lowest and highest portfolio balance at the end of your retirement was $-517,560 to $2,349,575, with an average at the end of $190,047. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 64 cycles failed, for a success rate of 46.2%.

Last edited by mathjak107; 06-29-2019 at 09:17 AM..
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Old 06-29-2019, 09:21 AM
 
71,490 posts, read 71,674,131 times
Reputation: 49074
so the average balances over 119 30 year cycles starting with 1 million is :

100% equities 2,718,000

75% equities 1,867,000

60% equities 1,417,000

50% equities 1,146000


30% equities 683,110

fixed income only 190,000


so you can see why high equity positions can be down a lot and still be way a head of lower equity levels or using fixed income alone. 100% equities can be down 40% and still be ahead of 50/50 in many outcomes .
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Old 06-29-2019, 09:47 AM
 
3,714 posts, read 3,117,690 times
Reputation: 7866
Quote:
Originally Posted by ysr_racer View Post
I'm not asking questions or disputing anything. I was just asking if anybody heard of the "rule of 100."

I'm not endorsing it
You should have included "yes or no answer only" in the thread title so we wouldn't be irritating you by discussing it.
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Old 06-29-2019, 09:53 AM
 
Location: SoCal
13,202 posts, read 6,308,074 times
Reputation: 9815
Quote:
Originally Posted by mathjak107 View Post
so the average balances over 119 30 year cycles starting with 1 million is :

100% equities 2,718,000

75% equities 1,867,000

60% equities 1,417,000

50% equities 1,146000


30% equities 683,110

fixed income only 190,000


so you can see why high equity positions can be down a lot and still be way a head of lower equity levels or using fixed income alone. 100% equities can be down 40% and still be ahead of 50/50 in many outcomes .
Do you happen to know what rate of return for those equity ratios ?
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Old 06-29-2019, 09:58 AM
 
71,490 posts, read 71,674,131 times
Reputation: 49074
Quote:
Originally Posted by NewbieHere View Post
Do you happen to know what rate of return for those equity ratios ?
rates of return are really all over the map .. what matters most is the sequence of a return ... that is why retirement planning is never based on average returns .. it is based on actual outcomes like the great depression , the wars , the crashes ... it is based on the worst outcomes for retirees ..... that is what a safe withdrawal rate is based on .

but i do have the data for the worst outcomes ...

this was the 30 year worst outcomes .

1907 stocks returned 7.77% -- bonds 4.250-- rebalanced portfolio 7.02- - inflation 1.64--

1929 stocks 8.19% - - bonds 1.74%-- rebalanced portfolio 6.28-- inflation 1.69--

1937 stocks 10.12 - - bonds 2.13 - rebalanced portfolio -- 7.24 inflation-- 2.82

1966 stocks 10.23 - -bonds 7.85 -- rebalanced portfolio 9.56- - inflation 5.38

for comparison the 140 year average's were:

stocks 8.39--bonds 2.85%--rebalanced portfolio 6.17% inflation 2.23%



but what made them the worst for retirees were the first 15 years of the 30 year period .


1907--- stocks minus 1.47%---- bonds minus .39%-- rebalanced minus .70% ---inflation 1.64%

1929---stocks 1.07%---bonds 1.79%---rebalanced 2.29%--inflation 1.69%

1937---stocks -- 3.45%---bonds minus 3.07%-- rebalanced 1.23%--inflation 2.82%

1966-stocks minus .13%--bonds 1.08%--rebalanced .64%-- inflation 5.38%
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Old 06-29-2019, 11:12 AM
Status: "Re-edit status" (set 14 days ago)
 
Location: Was Midvalley Oregon; Now Eastside Seattle area
4,145 posts, read 1,886,778 times
Reputation: 3167
^ so, what happens after the 30th year?.
JMO, I will be lucky to get 10 more years.
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Old 06-29-2019, 12:31 PM
 
Location: Rust'n in Tustin
2,176 posts, read 2,375,015 times
Reputation: 3807
Quote:
Originally Posted by 1insider View Post
You should have included "yes or no answer only" in the thread title so we wouldn't be irritating you by discussing it.
You're not the boss of me
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Old 06-29-2019, 01:35 PM
 
71,490 posts, read 71,674,131 times
Reputation: 49074
Quote:
Originally Posted by leastprime View Post
^ so, what happens after the 30th year?.
JMO, I will be lucky to get 10 more years.
Depends on the cycle 90% of them you ended with more than you started
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Old 06-29-2019, 01:46 PM
Status: "Re-edit status" (set 14 days ago)
 
Location: Was Midvalley Oregon; Now Eastside Seattle area
4,145 posts, read 1,886,778 times
Reputation: 3167
Quote:
Originally Posted by mathjak107 View Post
Depends on the cycle 90% of them you ended with more than you started
Which and when "cycle" is really the Question, isn't it?
Non inflation adjusted?
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