Article regarding bonds/no bonds in investment account

[StealthRabbit]

20 yrs so far in retirement 30 to go.
Ran 80/20 for most of those yrs.
currently 43/57 (at the moment), waiting to pick up some more bargains and probably get back to 65/35 (if conditions are favorable)

Reached FRA and took SS, since non-working spouse was capped at 50% of my FRA, and couldn't draw, until I did.

Haven't touched 'deferred / qualified' yet..., don't expect to until RMD. But that could change and not affect my plans.

Still running 90%+ probability of success on Firecalc and Fidelity planning software.

Been assisting with FIL who has made it to age 98 with a 98yo spouse. and still kicking hard. (I didn't plan to make it to age 98, neither did he!!!, especially with a sickly spouse for the last 20 yrs (thought she would croak by age 80). Impressive results, considering he didn't plan at all especially to a late age. (no pension / self employed / low SS / very little savings + went broke AFTER age 65 on RE deal). There's ways to survive. Plan as well as possible, but things will change (assuredly).

[mathjak107]

Originally Posted by Wile E. Coyote

Wow MJ, a 20% raise for 10 years less in retirement. That's pretty brutal

Thanks! I like the firecalc illustration (and the chart).

I notice you are using 40% equities now. Did you reduce your gold position?

but remember that is on top of inflation adjusting and also based on the worst outcomes .

if we have nothing like we did in 1907,1929,1937, 1965,1966 a safe withdrawal rate for 30 years with a 60/40 is 6-1/2%

in fact kitces recommends that if things are going well , then if three years in your balance is 50% higher then the day you started , take a 10% raise plus inflation adjusting .

repeat every three years , so even then , over 30 years you will see and extra 30% in raises .

so increases can take big changes to really see big differences because sequence risk can be so painful if it works against you.

but remember , the flip side is that you have the same odds of failing at 4% as you do ending with 6x what you started with , so both odds are pretty slim.

the whole premise of a safe withdrawal rate is that the income stays as rock steady in good and bad times as a pension or annuity and only the balance left varies .

but that is only true for all if we have nothing worse then we saw in 1966 …then all bets are off on pensions , annuities and your own investing holding as all are dependent on markets, inflation and rates.

in fact with the bond markets sweet spot being BBB and insurers holding 10x the level of this as they did in 2008 , every insurer can be at risk of mass failures according to moodys credit evaluations .

one slip from investment grade means there will be a mass dumping as these bonds fall from investment grade to junk .

reserve requirements would be 4x what they are … all those banks that failed had tons of assets but they couldn’t be sold quick enough to meet the reserve’s requirements and were forced in to insolvency