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what i said is if YOUR ARE TAKING A 4% WITHDRAWL FROM YOUR NEST EGG YOU NEED AT LEAST 7% TO KEEP YOUR PORTFOLIO GROWING AND WHERE IS THE TYPICAL RETIREE PORTFOLIO GOING TO GET 7%. AS 3% HAS TO STAY WITH YOUR NEST EGG TO KEEP IT EVEN.
But if you're not worried about keeping it even - I have no heirs and I plan on dying broke - there are exceptions to this
where I am retireing to I will only need $1,000.00 to $2,000.00 = to RMB 6,500.00 to RMB 13,000.00 a month for everything I'll need and still be able to place some in the bank, so I think I'm good with the less than $40,000.00 part
where I am retireing to I will only need $1,000.00 to $2,000.00 = to RMB 6,500.00 to RMB 13,000.00 a month for everything I'll need and still be able to place some in the bank, so I think I'm good with the less than $40,000.00 part
But if you're not worried about keeping it even - I have no heirs and I plan on dying broke - there are exceptions to this
your missing the point, the only way to guarantee that you can take 4% and inflation adjust it every year for as long as you and your spouse live is by increasing the base amount so every year is like your starting fresh.
once you hit your principal each year is like starting out for the first time with a lower amount and you should be taking less money.
as an example :
if i retired with 1,000,000 million bucks in 2007 and took 40k a year thats fine but by 2009 if i was down to 600k from the market drop i am no different than someone retiring now with 600k drawing 24k a year. the fact im still drawing 40k cuts my odds of not out living my money greatly.
the reality is most end up hitting principal and come out okay but thats only because spending drops as we age and believe it or not inflation effects us way less as we get older vs when we are raising a family so it kind of works out in the end. but non the less for the purpose of this discussion the only true way to stay even forever is to constantly grow your nest egg to match taking more.
Last edited by mathjak107; 05-20-2011 at 02:03 AM..
your missing the point, the only way to guarantee that you can take 4% and inflation adjust it every year for as long as you and your spouse live is by increasing the base amount so every year is like your starting fresh.
Inflation should kick in with a vengeance from all the counterfeiting the Fed has been doing. That should increase the percentage of yield on IRAs, 401ks. At the moment, for example, TRPs Stable Value Fund pays about 3.5%. A draw down of 4% would certainly kill it in time (as will MRDs) but if the rate goes to 10% from inflationary pressures then the dollar ammount would begin to increase,though the dollars will have less value. Inflation seems inevitable.
A question: why is it that high bond yields=lower bond prices and vice versa. Seems bassackwards to me.
well if qe2 was inflationary than stopping qe2 should be deflationary.. time will tell.
the reason is if bonds issued today are paying 5% interest and you own one paying 4% interest your bond would be impossible to sell if you wanted to sell it. why buy yours paying only 4% when i can buy a new one today at 5%?
in order to sell it instead of selling it for 1000 bucks which is what it will get at maturity you would have to sell it for only 950.00 to bring the interest and that discount to a level that equals 5% for the current buyer.
since bond funds are always buying and selling bonds the interest rate rises as they replace older bonds with higher paying new bonds. however the old bonds are being sold for less money causing a drop in the funds share price. the higher interest is offset by the lower share prices . since the fund is usually behind the curve and has way more old bonds than new ones usually you will be at a loss in the fund.
ill keep it simple and wont get into fund duration but there are some exceptions to the above with funds.
ill keep it simple and wont get into fund duration but there are some exceptions to the above with funds.
So, it's best not to buy bonds until the yields are up because they're cheaper then? Thanks. I'm still confused as to why anyone would buy bonds when the yields are down and prices up.
I have been following this with interest (no pun intended)
Annuity has previously been a 'dirty word' to me but you have made me reconsider.
A question is that some immediate annuities offer a variable rate.....with interest rates being so low now, isn't a variable rate one something to be considered?
But if you have have a BF you like - don't let financial stuff throw your relationship totally off track. Just do a little research and figure out what you might have to do to avoid getting screwed. For single/divorced/widowed women of a certain age - like over 30 - it's hard to find new male companions. So I would simply rule out or deal with or eliminate the worst case scenarios - and then have some fun . Robyn
My plan exactly!
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- it's hard to find new male companions. So I would simply rule out or deal with or eliminate the worst case scenarios - and then have some fun 
. Robyn
