Retire at the Coffeehouse
- SCoe46
- Normxxx
- bob90245
- bob90245
- bob90245
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» SCoe46 - Re: Re: Re: Re: Book on Retirement Investing?
In response to Re: Re: Re: Book on Retirement Investing? posted by bob90245:I advise limiting the initial withdrawal rate to 4 percent.
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bob, That sounds alot like brinkers withdrawl rate. Do you make annual inflation adjustments or is that 4 percent fixed? What about your stock/bond allocations in retirement? 50-50 blanced portfolio like brinker recommends or the standard 60-40 pension fund?
-- posted by SCoe46
» Normxxx - Re: Re: Book on Retirement Investing?
In response to Re: Book on Retirement Investing? posted by bob90245:Did a quick read. I agree; it was excellent! You're added to my Bookmark list.
If you are interested, I can put you on to several data sites.
I didn't read it close enough to critique, but nothing popped out at me except Figure 8, Inflation. The ordinate is not marked, but we only had one period when inflation exceeded 15%, and that was around 1946. I had forgotten that, until I checked your numbers (I thought it was 1979 or 1989, which seemed to be in the wrong place.)!
-- posted by Normxxx
» bob90245 - Re: Withdrawal Rates
In response to Re: Re: Re: Re: Book on Retirement Investing? posted by SCoe46:Do you make annual inflation adjustments or is that 4 percent fixed?
A 4% initial withdrawal rate should allow for adjusting with inflation. But use common sense. If we get high inflation like the 1970's, I would limit adjustments to say 5 or 6 percent. Even though the Bernstein example made no such limitation, I see no reason to tempt fate.
For retirees who can tolerate fluctuating income, then I would advise limiting to a fixed percent of 5%. Please run the numbers to see how that might turn out. As one of the authors I've read (Bernstein?), "You can be dining on Filet Mignon one year followed by sharing Alpo with the dog in another."
What about your stock/bond allocations in retirement? 50-50 blanced portfolio like brinker recommends or the standard 60-40 pension fund?
Both are fine. As luck would have it, I answered a similar question over at the Vanguard Diehards message board a few days back. I posted some good links if you're interested. Click HERE.
-- posted by bob90245
» bob90245 - Re: "Pie Shop" charts
In response to Re: Re: Book on Retirement Investing? posted by Normxxx:Two sources for you to look at, Norm. THIS is the official BLS site. And THIS is Gummy's site that has an easy-to-read table. You can see that 1946 had inflation at 18.2%, 1979 at 13.3% and 1989 at 4.6%. My intent was not to clutter those 1926-2003 charts with dates. Also see figures 1, 3, 5 and 7. The purpose was to show just the range (variability) and mean.
By the way, thanks for the compliment. <img src=http://www.suite101.com/images/emoteicon...>
-- posted by bob90245
» bob90245 - Re: Re: Withdrawal Rates
In response to Re: Withdrawal Rates posted by bob90245:This sentence should read:
"If we get high inflation like the 1970's, I would limit inflation adjustments to say 5 or 6 percent."
I don't mean to imply that a retiree can increase the total withdrawal to 5 or 6 percent. Just the amount to increase due to inflation.
-- posted by bob90245
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