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The best thing ysr_racer has been able to do is turn his portfolio into 105%!!
While I thought long and hard before jumping in... here I come. I have to say that I am a bit surprised by the self-righteous responses in this thread. First, everyone telling you that this is more complex than an equation is of course correct. However, many of those same people are also using a formula (4% drawdown) that might not be right for you. There are 100 ways to retire and be comfortable, but the real equation that no one has told you yet is that your passive income needs to be more than your expenses (or if you want to include inheritance, etc, it would go hear as well).
Passive income is any money that you have coming in that you aren't actively earning, since you (collective) are retired at this point.
That income can come from 4% drawdown method, dividends, royalties (if you right a book for instance), rental income which it appears you have, soc security, pension, etc. That combined income needs to be more than your expenditures + any other funds needed (inheritance, etc.). I love this stuff, so I will absolutely manage my own, however, I understand wanting to have someone else to help. Oh - and I agree wholeheartedly on the comment about need tax help, as I will absolutely look for that as I head into retirement in 10-15 years.
Last comment - don't assume that because you have an advisor from Fidelity you are safe and money decisions will be someone else's. Much like your doctor or lawyer analogy, there are good and bad in all fields, and theories should still make sense to you. Learning will help you in that endeavor, as it will help you ask the right questions and know when you have selected the right advisor.
Best of luck.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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When I ran our FIRE scenarios, the more fixed Income sources (SS, pensions, annuities, bonds) or reasonably steady income (rentals), the greater chance of never running out of money. If Your retirement portfolio also includes some equity MFs, you can your maximize total retiremment income, never run out of money And beat inflation if held long enough.
but he would be reducing equities yearly based on that ..that is not what a safe withdrawal rate does nor should be doing .. it will be prone to greater failure. it defeats decades of retirement research and studies .
He'd be reducing his equity-exposure by 1% annually. That's just a more aggressive form of the sort of annual rebalancing that you yourself are wont to advocate. If the OP's method is annually suboptimal by only 1%, I'd opine that he's doing well. His rationale might be specious, but we're not being graded here for the rigor or veracity of our methods. Only the outcome counts.
Quote:
Originally Posted by ysr_racer
So if you were 80 years old you'd invest 100 percent in VCR stocks? Or Blockbuster?
Diversification. Indexing.
As with most tendentious claims, there's a happy medium between the two competing extremes. In this case, the extremes are cash in a savings-account, and selling naked calls on margin.
Quote:
Originally Posted by ysr_racer
When I don't know how to do something myself, I hire a professional.
Was there a solicitation for professional-services at the seminar that you attended?
Sure, there's ample value in hiring a professional. But such recourse is neither necessary nor sufficient for success. The sort of training required to be, say, a medical doctor is vastly more intense and expansive than the training of investment-professionals. So too, the correlation between good training and actual professional success. For an untrained rube to be successful in performing surgery, would be a fluke, or a miracle. For a likewise untrained rube to beat the best-prepared financial professionals is not at all outlandish, and indeed, happens with such frequency, that there's good reason to call "investment professional" an oxymoron.
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Last comment - don't assume that because you have an advisor from Fidelity you are safe and money decisions will be someone else's. Much like your doctor or lawyer analogy, there are good and bad in all fields, and theories should still make sense to you. Learning will help you in that endeavor, as it will help you ask the right questions and know when you have selected the right advisor.
Best of luck.
It seems there are way, way more bad advisors than good ones. A great many are not primarily working for the best interest of the investor. Some are just out of date, or even more likely were never up to date. It does not take a lot to qualify as an advisor or to be hired as one.
Learning as much as you can will help in picking an advisor and in evaluating their advice. I do the same with physicians. Half of them are also below average.
recent research shows that despite the contrary nature of the strategy – allowing equity exposure to increase during retirement when conventional wisdom suggests it should decline as clients age – it turns out that a “rising equity glidepath” actually does improve retirement outcomes! If market returns are bad in the early years, a rising equity glidepath ensures that clients will dollar cost average into markets at cheaper and cheaper valuations; and if markets are good… well, clients won’t have a lot to worry about in retirement anyway
So if you were 80 years old you'd invest 100 percent in VCR stocks? Or Blockbuster?
The older I get, the more conservative I'll become. At this point we got enough to live the rest of our lives on rental income, social security, and cash.
The last thing I want to do when I'm older is gamble away the rest.
Who on this board is recommending individual stocks? You're not asking advice, you already have your mind made up.
recent research shows that despite the contrary nature of the strategy – allowing equity exposure to increase during retirement when conventional wisdom suggests it should decline as clients age – it turns out that a “rising equity glidepath” actually does improve retirement outcomes! If market returns are bad in the early years, a rising equity glidepath ensures that clients will dollar cost average into markets at cheaper and cheaper valuations; and if markets are good… well, clients won’t have a lot to worry about in retirement anyway
the problem kitces and pfau ran in to subsequently is that rates were to low to make the rising glide path work well back then ...
they revised that idea later on to when interest rates were higher ... i don't remember what level was needed though .
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