Retire at the Coffeehouse
- bob90245
- bob90245
- bob90245
- bob90245
- bob90245
- bob90245
- bob90245
- bob90245
- bob90245
- SCoe46
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» bob90245 - Chapter 11: Year 2002
.Year 2002 has come and gone. Here’s how the Coffeehouse Portfolio fared:
Last year, we withdrew $42,436. And to keep pace with a 3% inflation rate, we will need to withdraw $43,709. First, we will gather the dividends.
<img src=http://www.geocities.com/bob90245/RealDi...>
Unfortunately, there are no gaining funds this year from which to take profits from. So instead we will dip into cash to take what we need to meet our Year 2002 spending needs.
<img src=http://www.geocities.com/bob90245/RealGa...>
Here is how our portfolio looks at the end of 2002:
<img src=http://www.geocities.com/bob90245/RealBa...>
The portfolio certainly looks like it’s crying out for rebalancing. But, I will again leave it as is.
We’re done with the third year of retirement. We’ve spent our third withdrawal of $42,436. And we have our fourth year’s withdrawal of $43,709 in the bank. So we’re prepared for another 12 months. In the next chapter, we’ll do it all again for Year 2003.
-- posted by bob90245
» bob90245 - Chapter 12: Year 2003
.Year 2003 has come and gone. Here’s how the Coffeehouse Portfolio fared:
Last year, we withdrew $43,709. And to keep pace with a 3% inflation rate, we will need to withdraw $45,020. First, we will gather the dividends.
<img src=http://www.geocities.com/bob90245/RealDi...>
Next, we take profits from the gaining funds. This time, the profits were more than sufficient to meet our Year 2004 spending needs.
<img src=http://www.geocities.com/bob90245/RealGa...>
The remaining profits are then used to replenish the lagging funds from last year.
<img src=http://www.geocities.com/bob90245/RealBu...>
Year 2003 was a big up year. This made a big impact on bringing our funds nearly up to where they started. Plus, the balances are almost to our target allocation.
<img src=http://www.geocities.com/bob90245/RealBa...>
We’re done with the fourth year of retirement. We’ve spent our fourth withdrawal of $43,709. And we have our fifth year’s withdrawal of $45,020 in the bank. So we’re prepared for another 12 months. In the next chapter, we’ll do it one more time for Year 2004.
-- posted by bob90245
» bob90245 - Chapter 13: Year 2004
.Year 2004 has come and gone. Here’s how the Coffeehouse Portfolio fared:
Last year, we withdrew $45,020. And to keep pace with a 3% inflation rate, we will need to withdraw $46,371. First, we will gather the dividends.
<img src=http://www.geocities.com/bob90245/RealDi...>
Next, we take profits from the gaining funds. The profits were more than sufficient to meet our Year 2005 spending needs.
<img src=http://www.geocities.com/bob90245/RealGa...>
Year 2004 was another big up year with no lagging funds. So this time, we will just rebalance.
<img src=http://www.geocities.com/bob90245/RealBa...>
We’re done with the fifth year of retirement. We’ve spent our fifth withdrawal of $45,020. And we have our sixth year’s withdrawal of $46,371 in the bank. So we’re prepared for another 12 months.
-- posted by bob90245
» bob90245 - Conclusion
.This concludes my presentation of the “Retire at the Coffeehouse” strategy. It incorporates the following principles:
• Based on historical returns of common asset classes and inflation, use a “safe” initial withdrawal rate of 4%• Use a collection of funds each from a different area of the market. The example I like is the Coffeehouse Portfolio.
• Use a withdrawal strategy to minimize the effects of “Reverse Dollar Cost Averaging”. We do this by taking profits from gaining funds while leaving lagging funds untouched for future recovery.
By following these principles, a retiree has a better chance of withdrawing inflation-adjusted annual income for the rest of his life.
You may post comments, questions, praise or criticism. Please limit discussion to this specific strategy. Comments of a general nature would be best posted on these threads:
Critical Mass - Care and Feeding For Once Attained
http://www.suite101.com/discussion.cfm/i...
Retirement Planning
http://www.suite101.com/discussion.cfm/i...
Slice and Dice
http://www.suite101.com/discussion.cfm/i...
-- posted by bob90245
» bob90245 - New Thread: Start at Message 1
.Good Morning!
This is a new thread. So be sure to start at the first message.
Enjoy!
-- posted by bob90245
» SCoe46 - Great work bob!
bob, thanks for the very informative information you provided here. I have decided to go with a modified Coffeehouse portfolio:1)50/50 balanced, (4%) annual withdrawl plus inflation. 5% of my total equity exposure will be in the vanguard REIT fund.
2)Instead of a "total international" fund I Divided up my international exposure along the lines of the (4)Merriman recommended funds, small caps, value etc.
3)I'm going to stick with Brinkers(3)Vanguard fixed income fund recommendations included in his balanced portfolio three. I find it way to hard for individuals like me to purchase new issues of corporate bonds without huge mark ups..
In response to New Thread: Start at Message 1 posted by bob90245:
-- posted by SCoe46
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