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Re: Stocks: How Bad It Can Get

As a young investor in my infancy years of investing, I can't wait for another financial crisis. 60-80% drop for next 2-3 years? I can only hope. :wink: Be careful what you wish for. If another 60-80% occurs, there is a good chance that you will lose your job as well. If you are in business for you...
by Cut-Throat
Tue Apr 15, 2014 4:56 pm
 
Forum: Investing - Theory, News & General
Topic: Stocks: How Bad It Can Get
Replies: 72
Views: 5238

Re: Online Retirement Calculators

It depends on what one wants their retirement calculator to calculate. Some folks want a calculator to tell them what number they will need to retire. FIRECalc does this calculation. Other folks want to know how much they will need to save every year for how many years in order to get to a number. ...
by Cut-Throat
Sat Apr 12, 2014 7:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Online Retirement Calculators
Replies: 17
Views: 1630

Re: How are you preparing for the coming bear market

I am in the withdrawal phase now that I am retired. So I use VPW (Variable percentage withdrawal) , which means I am taking more money out of the market during this Bull market. Therefore, when the Bear comes, there will be less money invested to 'take the hit' when the market tanks. Like buying low...
by Cut-Throat
Sun Apr 06, 2014 8:11 am
 
Forum: Investing - Theory, News & General
Topic: How are you preparing for the coming bear market
Replies: 104
Views: 7765

Re: And suddenly, I'm done...

Congrats on your Retirement! :happy

Ours was this year also!
by Cut-Throat
Thu Apr 03, 2014 12:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: And suddenly, I'm done...
Replies: 24
Views: 4945

Re: Do you work part time in retirement?

Retirement means Not working at all.
by Cut-Throat
Sat Mar 29, 2014 7:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you work part time in retirement?
Replies: 59
Views: 3877

Re: We Don't want to die with Money

I also plan on spending as much as I can.

What you are looking for is VPW. See this Thread.

http://www.bogleheads.org/forum/viewtopic.php?f=10&t=120430
by Cut-Throat
Wed Mar 26, 2014 6:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: We Don't want to die with Money
Replies: 45
Views: 3745

Re: Social Security Election

Read this post. It has an example that you have not given any thought to.

http://www.bogleheads.org/forum/viewtopic.php?f=10&t=102609&p=1489452&hilit=Social+Security#p1487956
by Cut-Throat
Sun Mar 23, 2014 11:36 am
 
Forum: Investing - Theory, News & General
Topic: Social Security Election
Replies: 4
Views: 424

Re: William Bernstein-When you've won the game, why keep pla

While that's true, the guy retiring in 2009 can make the case that his SWR should be 6-8% since it WOULD HAVE been worth 25-50% more (assuming 60-40 to 40-60 allocation) a year before. This is where SWR "science" breaks down. And where valuations matter. In the real world, it's a bit of c...
by Cut-Throat
Wed Mar 19, 2014 7:49 pm
 
Forum: Investing - Theory, News & General
Topic: William Bernstein-When you've won the game, why keep playing
Replies: 241
Views: 24528

Re: William Bernstein-When you've won the game, why keep pla

There is not 'free lunch' but there is a much smarter lunch. You don't spend the same amount every year. I don't care who you are. Some years you buy cars. Remodel the house etc. You should have a plan to spend less in a bear market. It's the reverse of buying low and selling high. Actually, we spe...
by Cut-Throat
Mon Mar 17, 2014 9:33 am
 
Forum: Investing - Theory, News & General
Topic: William Bernstein-When you've won the game, why keep playing
Replies: 241
Views: 24528

Re: William Bernstein-When you've won the game, why keep pla

Once the market drops, it will be a 4% withdrawal rate. Versus the people taking 4% now who will be looking at a 6-8% rate when (if) it drops. Not if you use VPW..... Taking a Fixed inflation Adjusted Withdrawal Amount makes no sense. For the reason you stated. Refresh my memory...what is VPW...&qu...
by Cut-Throat
Sun Mar 16, 2014 9:29 pm
 
Forum: Investing - Theory, News & General
Topic: William Bernstein-When you've won the game, why keep playing
Replies: 241
Views: 24528

Re: William Bernstein-When you've won the game, why keep pla

Leesbro63 wrote:Once the market drops, it will be a 4% withdrawal rate. Versus the people taking 4% now who will be looking at a 6-8% rate when (if) it drops.


Not if you use VPW..... Taking a Fixed inflation Adjusted Withdrawal Amount makes no sense. For the reason you stated.
by Cut-Throat
Sun Mar 16, 2014 12:54 pm
 
Forum: Investing - Theory, News & General
Topic: William Bernstein-When you've won the game, why keep playing
Replies: 241
Views: 24528

Re: William Bernstein-When you've won the game, why keep pla

It depends a lot of what % of your expenses are dependent on withdrawals from investment net worth. If the market dropped 50% on the day I retired at 70/30 AA, my total income (under a dynamic 4% of year end balance approach) would drop 15%. That's no fun but it's certainly manageable. I'm amused w...
by Cut-Throat
Sun Mar 16, 2014 11:46 am
 
Forum: Investing - Theory, News & General
Topic: William Bernstein-When you've won the game, why keep playing
Replies: 241
Views: 24528

Re: Who cares about inflation in retirement?

I hate inflation. I suspect if we are ever visited by an advanced society, they will consider our "benign" target of 2% inflation to be on a par with burning witches in Salem. In 2001 , $1000 before taxes of my pension purchased $1000 worth of goods. That same nominal $1000 now purchases ...
by Cut-Throat
Sat Mar 15, 2014 6:41 pm
 
Forum: Investing - Theory, News & General
Topic: Who cares about inflation in retirement?
Replies: 55
Views: 3758

Re: William Bernstein-When you've won the game, why keep pla

Everything is a gamble. If you gamble for more money, you are wasting time. I personally find time far more valuable than money. I have no idea how many decades, years, or days I will be healthy. That is why I retired early. I may be less rich, and my security if I make it to 90 or 100 might be sli...
by Cut-Throat
Fri Mar 14, 2014 12:53 pm
 
Forum: Investing - Theory, News & General
Topic: William Bernstein-When you've won the game, why keep playing
Replies: 241
Views: 24528

Re: Buy vs rent no longer relevant?

"you're paying someone else's mortgage" "you don't want to wait too long" "buy while you're still young" "the longer you wait the harder it is to get a 25 year mortgage" ... in other words, nothing positive about renting. I used to rent for many years before ...
by Cut-Throat
Tue Mar 11, 2014 9:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: Buy vs rent no longer relevant?
Replies: 60
Views: 5841

Re: SWR w/current projected stock/bond returns

None of these systems will ever run out of money. How do you compare them? You backtest them against the historical record and decide for yourself if you could live with the Volatility. For Example: Using VPW with Increase the percentage every year rather than remaining constant (Which I prefer, as...
by Cut-Throat
Mon Mar 10, 2014 9:18 am
 
Forum: Investing - Theory, News & General
Topic: SWR w/current projected stock/bond returns
Replies: 19
Views: 1056

Re: SWR w/current projected stock/bond returns

I also think the difference between "3.5%" and "4%" is lost in the noise, that is the number can't be determined that accurately. And I also think you can't make a safe, low-volatility silk purse out of a risky, high-volatility sow's ear. All that said, I just do not believe tha...
by Cut-Throat
Sun Mar 09, 2014 9:39 pm
 
Forum: Investing - Theory, News & General
Topic: SWR w/current projected stock/bond returns
Replies: 19
Views: 1056

Re: SWR w/current projected stock/bond returns

steve_14 wrote:Nobody in the history of retirement has ever followed a completely fixed withdrawal rate, without varying it based on market returns and spending needs.


Then why plan on it?
by Cut-Throat
Sun Mar 09, 2014 8:49 pm
 
Forum: Investing - Theory, News & General
Topic: SWR w/current projected stock/bond returns
Replies: 19
Views: 1056

Re: SWR w/current projected stock/bond returns

Are you interested in a Withdrawal System where you don't have to predict current or future stock/bond returns? How about a Withdrawal Plan that cannot Fail ? Look at VPW ?..... It will probably let you spend more money than any fixed withdrawal system. I am spending 4.3% of my Portfolio Balance thi...
by Cut-Throat
Sun Mar 09, 2014 7:41 pm
 
Forum: Investing - Theory, News & General
Topic: SWR w/current projected stock/bond returns
Replies: 19
Views: 1056

Re: 2 Comma Club

The first 2 commas are a challenge for sure.. That 3rd Comma is a real bitch !
by Cut-Throat
Fri Mar 07, 2014 9:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: 2 Comma Club
Replies: 24
Views: 2814

Re: Retirees: About your retirement

Would you say that 'retirement' was a real goal of yours that you aspired to and worked towards, or was it more of a residual of years of working or hating your occupation that you ended up in? Or something else? :D It was a goal.... Retirement is my 'true calling'. I get to do my agenda instead of...
by Cut-Throat
Fri Mar 07, 2014 3:13 pm
 
Forum: Investing - Theory, News & General
Topic: Retirees: About your retirement
Replies: 55
Views: 5492

Re: Variable Percentage Withdrawal (VPW)

You have pretty good judgement, so I'll trust you'll do the right thing. Again, thanks for a Great Tool !

As a general rule, I am in favor of the KISS Principle. Like GOOGLE.... One simple screen with a box to enter something in. That is why everyone uses it and it works.
by Cut-Throat
Fri Feb 28, 2014 7:09 pm
 
Forum: Investing - Theory, News & General
Topic: Variable Percentage Withdrawal (VPW)
Replies: 336
Views: 28013

Re: Variable Percentage Withdrawal (VPW)

I just noticed your edit. What would you suggest as improvement? I've come to prefer looking at nominal values against inflation, instead of looking at inflation-adjusted values, as CPI-U so volatile that it clouds the stability contributed by bonds to the nominal withdrawal path. Actually, I like ...
by Cut-Throat
Fri Feb 28, 2014 5:40 pm
 
Forum: Investing - Theory, News & General
Topic: Variable Percentage Withdrawal (VPW)
Replies: 336
Views: 28013

Re: Retirement: Protect Your Critical First Decade

C-T, Yes, add a few refinements and you are converging on VPW, which is a much better way to approach the issue. But, even my simple example can be solved with a little mental accounting. Suppose you have $1 million, and you want 4%. Well, take $60,000 and put in in your "Just in case" fu...
by Cut-Throat
Thu Feb 27, 2014 6:31 pm
 
Forum: Investing - Theory, News & General
Topic: Retirement: Protect Your Critical First Decade
Replies: 38
Views: 3548

Re: Retirement: Protect Your Critical First Decade

That is only accurate if you have to liquidate assets to generate income. If your income stream does not decline when the market drops you will not have to reduce spending. Or if your income exceeds your spending by 50%. Too many investors only want to make their retirement "number", not ...
by Cut-Throat
Thu Feb 27, 2014 5:59 pm
 
Forum: Investing - Theory, News & General
Topic: Retirement: Protect Your Critical First Decade
Replies: 38
Views: 3548

Re: Retirement: Protect Your Critical First Decade

Here, suppose you have $ 1 million and take 4%, $40,000. Inflation is 3% so next year you want $41,200. But, the market drops 50% and your 50/50 portfolio is now about $710,000. Well, $41,200 is 5.8% of that, which is nuts. L. Agree. That is why taking an ever increasing percentage of Portfolio Bal...
by Cut-Throat
Thu Feb 27, 2014 5:57 pm
 
Forum: Investing - Theory, News & General
Topic: Retirement: Protect Your Critical First Decade
Replies: 38
Views: 3548

Re: Retirement: Protect Your Critical First Decade

Cut Throat wrote: Have you looked at VPW ?..... It cannot fail and will probably let you spend more money than any fixed withdrawal system. Simply by withdrawing less in down years and more in up market years. http://www.bogleheads.org/forum/viewtopic.php?f=10&t=120430 I appreciate getting this...
by Cut-Throat
Thu Feb 27, 2014 4:24 pm
 
Forum: Investing - Theory, News & General
Topic: Retirement: Protect Your Critical First Decade
Replies: 38
Views: 3548

Re: Early Retirement and ObamaCare

A friend of mine recently decided to retire early. He's 56. He feels he has accumulated enough to live out his life comfortably. We were discussing whether or not he would qualify for a subsidy under Obamacare since his income over the next few years will be essentially dividend and interest income...
by Cut-Throat
Thu Feb 27, 2014 3:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: Early Retirement and ObamaCare
Replies: 26
Views: 2540

Re: Retirement: Protect Your Critical First Decade

Increasing equity exposure late in life seems conunter-intuitive. The main point in the study is to guard against the small chance of a very large drop in equities early in retirement. The big issue is the problem of too large an initial WR. I have planned to adjust my initial WR by comparing the P...
by Cut-Throat
Thu Feb 27, 2014 2:20 pm
 
Forum: Investing - Theory, News & General
Topic: Retirement: Protect Your Critical First Decade
Replies: 38
Views: 3548

Re: California vs. Texas

You get what you pay for.
by Cut-Throat
Wed Feb 26, 2014 1:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: California vs. Texas
Replies: 32
Views: 2814

Re: Momentum: good & bad times and asset allocation

Let me make the smallcap example more clear. Say Linda has this asset allocation, with a rebalancing policy: 20% Treasuries 20% TIPS 40% Total US Stock Market 20% Total International And wants to change the allocation to tilt to, for example, smallcap. This is intended to be a permanent change. But...
by Cut-Throat
Wed Feb 26, 2014 10:22 am
 
Forum: Investing - Theory, News & General
Topic: Momentum premium & adding MOM to Asset Allocation
Replies: 23
Views: 1451

Re: Getting a Good Start in Retirement

You here a lot about the perils of starting your retirement poorly with a market drop and/or overspending. Is anyone aware of the impact that a good first few years would have on long term retirement finances? Thanks Sure, this is easy. Run a Tool like Firecalc or VPW and put in your start date of ...
by Cut-Throat
Sun Feb 23, 2014 8:21 pm
 
Forum: Investing - Theory, News & General
Topic: Getting a Good Start in Retirement
Replies: 4
Views: 853

Re: Black Monday and Target Date funds

StarbuxInvestor wrote:Does anyone have any insight or an opinion relating to the OP question?


My opinion is that they would act like a 'brake' since they would be buying stocks when lots were selling. Mostly to maintain their AA.

And this would benefit the Holders of the Target Funds.... AKA 'Buying Low'.
by Cut-Throat
Sat Feb 22, 2014 11:58 am
 
Forum: Investing - Theory, News & General
Topic: Black Monday and Target Date funds
Replies: 27
Views: 1422

Re: Black Monday and Target Date funds

If you've reached the age of 65 you are probably invested in the Target Retirement Income Fund and the stock percentage remains the same. Vanguard's chart (see the PDF) indicates that the stock sell off accelerates at age 65 and continues until about age 72, where it flattens out. What you are miss...
by Cut-Throat
Sat Feb 22, 2014 11:43 am
 
Forum: Investing - Theory, News & General
Topic: Black Monday and Target Date funds
Replies: 27
Views: 1422

Re: Black Monday and Target Date funds

You can see the planned pattern of reducing stock holdings in this Vanguard PDF: https://pressroom.vanguard.com/nonindexed/Approach_to_TDF_12.04.2013.pdf At some point (especially if you have reached the age of 65), they are selling off stocks and buying bonds. If that coincides with stocks droppin...
by Cut-Throat
Sat Feb 22, 2014 11:27 am
 
Forum: Investing - Theory, News & General
Topic: Black Monday and Target Date funds
Replies: 27
Views: 1422

Re: Self protecting a SPIA against inflation

I think one additional benefit of an SPIA to consider is as insurance against the twin problems of aging: your diminished ability to effectively manage your retirement finances, and your diminished ability to recognize the former. If at least some of your income is coming from sources like social s...
by Cut-Throat
Fri Feb 21, 2014 6:18 pm
 
Forum: Investing - Theory, News & General
Topic: Self protecting a SPIA against inflation
Replies: 47
Views: 2275

Re: Safe Withdrawal Rate

I think the one year (1966) 4% didn't work was 1966, and 3.7% did work... And you can always modify your withdrawals (or buy a SPIA) if you see a problem 10-15 years in. Besides, you have a somewhat small chance of living 30 years after 60 anyway... so combining those two chances, 4% gets you prett...
by Cut-Throat
Mon Feb 17, 2014 8:30 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate
Replies: 91
Views: 5719

Re: Safe Withdrawal Rate

That appears to be a table of life expectancy at birth. It would be more relevant to see a table of life expectancy from age 65. Those who reach 65 life more than a few years beyond 65. Agree, most of the gains in life expectancy were in the areas of infant mortality. Anecdotally, all of my relativ...
by Cut-Throat
Mon Feb 17, 2014 6:03 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate
Replies: 91
Views: 5719

Re: Safe Withdrawal Rate

Unfortunately those who would have retired in the really bad year of 1966 are mostly no longer around to be heard from. Those retirees would also not likely have had the opportunities to invest they way people are doing now. It would be interesting to hear tales from that cohort, however. They all ...
by Cut-Throat
Mon Feb 17, 2014 1:08 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate
Replies: 91
Views: 5719

Re: Safe Withdrawal Rate

Before retirement, how do you regulate your spending? a) Do you read a bunch of inconsistent research studies about a "safe spending rate," based on Monte Carlo simulations of a lot of peoples' historically fluctuating salary histories? Or b) do you follow a version of the Taylor Larimore...
by Cut-Throat
Mon Feb 17, 2014 9:29 am
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate
Replies: 91
Views: 5719

Re: Tax confusion & Questions...

I'd be confused also..... That's why I always hire someone to do my taxes. My tax guy (Not a CPA) charges me $175 a year. This has paid for itself many times over. I have used him for 20 years. I would never do my taxes, I know it would cost me more money. Consulting with my tax guy, that has been t...
by Cut-Throat
Sun Feb 16, 2014 9:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax confusion & Questions... [Residence in multiple states]
Replies: 11
Views: 459

Re: Safe Withdrawal Rate

No SWR. We use the Taylor Larimore method. Simplest - and best - withdrawal method ever! Pair it with the simplest - and possibly best - asset allocation method ever, a Vanguard Target Retirement fund, and you've really got something! For all those reading this thread, understand that the 'Taylor L...
by Cut-Throat
Sun Feb 16, 2014 6:44 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate
Replies: 91
Views: 5719

Re: Safe Withdrawal Rate

I am using the VPW method. Variable Percentage Withdrawal. It cannot fail and it depletes my portfolio when I tell it to. And I get to start my withdrawals at 4.3%. SWR rates are very ineffective. They can fail and usually leave a Large amount on the table. See this thread http://www.bogleheads.org/...
by Cut-Throat
Sun Feb 16, 2014 5:55 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate
Replies: 91
Views: 5719

Re: Leverage Your Way To A Richer Retirement

Sounds kind of like the Vegas Roulette Plan. Bet on RED only, if you lose double it until you win. Place original bet when you win, repeat until you're a Millionaire.
by Cut-Throat
Thu Feb 13, 2014 6:59 pm
 
Forum: Investing - Theory, News & General
Topic: Leverage Your Way To A Richer Retirement
Replies: 28
Views: 3694

Re: 2nd in series on AA, risk tolerance/willingness to take

From the article: "Assume you begin with a portfolio that is $600,000 in stocks and $400,000 in bonds. Now assume the stock market loses 50 percent and bonds have increased 12.5 percent . Thus, the portfolio is now at $750,000, with $300,000 (40 percent) in stocks and $450,000 (60 percent) in ...
by Cut-Throat
Thu Feb 13, 2014 11:16 am
 
Forum: Investing - Theory, News & General
Topic: 2nd in series on AA, risk tolerance/willingness to take risk
Replies: 9
Views: 705

Re: minimizing tax hit from selling rental condo

How would I calculate it now, so that I can start saving to pay the extra taxes when due next year? This confused me a bit. If you are selling it at gain, I would assume that you would not have to 'Start Saving' to pay the extra taxes, but could pay the taxes from the sale of the condo. Maybe you c...
by Cut-Throat
Thu Feb 13, 2014 11:00 am
 
Forum: Personal Finance (Not Investing)
Topic: minimizing tax hit from selling rental condo
Replies: 5
Views: 472

Re: 2nd in series on AA, risk tolerance/willingness to take

Larry, I read your article and I have a question. You had said that if you could handle a 25% portfolio Loss that would translate to 60% Equities. How did you arrive at that? I had heard that a 25% loss would translate to 50% equities. The 'Rule of Thumb' was to double the percentage of Loss that yo...
by Cut-Throat
Thu Feb 13, 2014 10:36 am
 
Forum: Investing - Theory, News & General
Topic: 2nd in series on AA, risk tolerance/willingness to take risk
Replies: 9
Views: 705

Re: Ding! Check engine light is now on.

I know what I'm going to do.......I am going to go fishing.
by Cut-Throat
Wed Feb 12, 2014 9:22 am
 
Forum: Investing - Theory, News & General
Topic: Ding! Check engine light is now on. [PE10 exceeds 25]
Replies: 108
Views: 10552

Re: Coming to terms with my awful track record

I had similar results also and now am invested in Target Retirement Funds. We still have a few really smart people here that can beat the market, but I know I am not one of them.
by Cut-Throat
Tue Feb 11, 2014 10:12 pm
 
Forum: Investing - Theory, News & General
Topic: Coming to terms with my awful track record
Replies: 20
Views: 2096
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