Bogleheads

[PreRetiree2]

Dear Guys,
I had read two good books on how to withdraw money from your retirement funds - Ray Lucia's Buckets of Money and The Grangaard strategy by Paul Grangaard. Last weekend I went to Ray Lucia's Symposium in San Diego and bought his new book "Ready, Set, Retire."

Well, I've read it and am surprised and disappointed by the following:

1) He suggests 20% of the stock bucket #3to be in real estate of which 5% is in REITs and 15% in nontradeable REITS ...yes, 15% in stuff that can't be sold for 10 -15 years!

2) He wants the rest of your stock portfolio to have 3 "managers":
- 1) an active "oversight manager" who over sees
-2) a "strategic" manager who oversees the taxable "passive" account
-3) a "strategic" manager who oversees the nontaxable portion who is somewhat aggressive whose mission is to achieve "alpha results" as opposed to "beta results" from the overall stock market.

Now, being a bit of a suspicous Bogglehead, I assume the following:
1) The oversight manager is an employee of Ray Lucia Inc.
2) They pick the strategic and tactical manager who get their "fees'
3) The fees of a nontradeable REIT are enormous and risky

In conclusion, to say that I like the buckets "concept" is true. To say I am stunned and disappointed by the "actual" buckets proposal is true..to my way of thinking, they are "laddering" fees by using so many managers and apalleld at the concept of nontradeable REITs ...again almost a "rip-off"...who gets the fees going into a non "saleable" entity.
What do you guys think?
For more details see Ray Lucia's "Ready, Set, Retire."

[stratton]

Considering the loads and 12b-1 fees from the non-traded REITs they ought to do everything for "free." He makes the loaded American Funds look cheap. Going to a financial planning firm that charges 1% assets under management (AUM) would be a vastly better deal if they put you in no-load funds and kept ER fees down.

Paul

[4th&Goal]

[TheEthicalAdvisor]

[4th&Goal]

[mlebuf]

[TheEthicalAdvisor]

[4th&Goal]

[CyberBob]

[tjg911]

i just read buckets of money about 2 weeks ago. i was not impressed.

while i don't remember all the negative stuff i was surprised at "need" for a or many advisors. sounds like a book written by an advisor!

i did not care for his investments suggestions and i think he made the whole thing way too difficult. a lot of assumptions about the time periods and how the markets will look at 7 and 14 years or whatever time frame you chose.

when i was done i thought, what a pos! i was really disappointed in the book and his philosophy. i will say that you can have 3 buckets like in his book but i prefer to see it as cash for 1 year expenses perhaps 2 years. then fixed income funds and equity funds. this is diversification 101 really. i'm not assigning money to a bucket for 7 or 14 years and just sitting on that. oh he talks about rebalancing and shifting money in the buckets to suit your needs but frankly it's just too much work. assign your % for fi and equities then decide on your funds or etfs. rebalance each year and draw income from your gainers as needed.

read retire at the pie shop at bob's website http://bobsfiles.home.att.net/WhatsNew.html . it's a lot easier and i can live with it better than the buckets of money rigamarole!

tom
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"Anyone who bought stocks in mid-1929 and held onto them saw most of his or her adult life pass by before getting back to even." — Richard M. Salsman

[bearcub]

Vanguard is coming out with their managed payout funds soon.Fidelity already has their income replacementfunds in service.You may want to check these out also.

[mlebuf]

Hi Cyberbob,

Sorry I didn't see your question sooner. I use the Armstrong two bucket strategy with 7 years worth of withdrawals in bonds and cash and the balance of the rest in a widely diversified stock portfolio.

Best wishes,
Michael
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Best wishes,
Michael

Invest your time actively and your money passively.