Search found 31 matches

by GAAP
Fri May 19, 2017 5:59 pm
Forum: Investing - Help with Personal Investments
Topic: Why buy travel insurance when some credit cards offer it for free
Replies: 8
Views: 1175

Re: Why buy travel insurance when some credit cards offer it for free

Chase Sapphire Rewards basically provides limited Trip Cancellation and Trip Interruption protection. A travel insurance policy (at least the ones I buy) provides: medical insurance, potentially even for more adventurous pursuits like base-jumping. dental insurance emergency medical expenses -- nota...
by GAAP
Tue May 09, 2017 2:02 pm
Forum: Investing - Help with Personal Investments
Topic: Inherited trust/personal asset allocations
Replies: 15
Views: 1129

Re: Inherited trust/personal asset allocations


Yes but this is an Inherited Roth IRA, so distributions are subject to RMD requirements, but not taxable.

I am not sure how that affects the rest of your post? I think your concept is still valid regardless of tax issues.


Yup, I was editing that while you posted -- Bogleheads are fast...

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by GAAP
Tue May 09, 2017 1:40 pm
Forum: Investing - Help with Personal Investments
Topic: Inherited trust/personal asset allocations
Replies: 15
Views: 1129

Re: Inherited trust/personal asset allocations

2. The Inherited Roth IRA will have RMDs each year. Does that change optimal asset location? It isn't like a 401k/traditional IRA where it gets taxed, so I'm not sure if bonds should go in there or not? Inherited IRA Distributions are taxed when taken -- whether RMDs or otherwise. Investment return...
by GAAP
Tue May 09, 2017 11:40 am
Forum: Personal Consumer Issues
Topic: Renting correct size car
Replies: 31
Views: 2159

Re: Renting correct size car

I suggest shopping around with other providers -- Hertz is generally fairly expensive. Of the majors, Enterprise tends to be cheaper (even than National which is owned by the same company). Smaller providers such as Advantage or Thrifty can be even cheaper.

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by GAAP
Sun Aug 28, 2016 11:05 am
Forum: Investing - Theory, News & General
Topic: Adding Inflation Protection to a Portfolio
Replies: 14
Views: 1754

Re: Adding Inflation Protection to a Portfolio

There is an underlying assumption in this discussion that inflation is at least somewhat "reasonable". That has not been true everywhere in the past -- consider Germany between the world wars ( https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic ), or Brazil in the 1980s ( ...
by GAAP
Tue Aug 23, 2016 7:18 pm
Forum: Investing - Theory, News & General
Topic: This is why a 100% stock allocation is a bad idea
Replies: 68
Views: 9877

Re: This is why a 100% stock allocation is a bad idea

Not exactly my experience -- but my mother's. In 1981, at the age of 54, she was widowed with only life insurance proceeds to support her (very limited SSI). She did quite well with that money over the years. She was a buy-and-hold investor, choosing individual stocks and bonds (very few funds). At ...
by GAAP
Tue Aug 23, 2016 6:53 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 1: guiding principles and intent
Replies: 24
Views: 2542

Re: Withdrawal method proposal -- Part 1: guiding principles and intent

Yes! But this 'wants' money is not just basic survival needs, it includes things that makes life enjoyable. Some only include, food clothing and accommodation. I include everything I do now minus expenses I will not have in retirement (mortgage, investements, life ins etc). P.S: You may notice I am...
by GAAP
Tue Aug 23, 2016 6:51 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 2: Implementation
Replies: 32
Views: 3102

Re: 4% withdrawal rate justification

I would start by doing the same thing Bengen and the Trinity study did: perform historical backtesting to find a number that works. Given that you have a complicated system with multiple moving parts, this obviously makes it more challenging. Start by only have one variable, find what works best fo...
by GAAP
Sun Aug 21, 2016 6:05 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 1: guiding principles and intent
Replies: 24
Views: 2542

Re: Withdrawal method proposal -- Part 1: guiding principles and intent

My plan doesn't satisfy all you requirements but many of it. TIPS ladder to fund my needs from retirement till 70 (basic needs and basic luxury and some emergency/contingency). Side portfolio for ultimate luxuries only (first class ticket, luxury vacations - May be like the $75k/person Antarctica e...
by GAAP
Sat Aug 20, 2016 6:46 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 1: guiding principles and intent
Replies: 24
Views: 2542

Re: Withdrawal method proposal -- Part 1: guiding principles and intent

Curious - do you have data for the market (Stocks/Bonds) returns in Brazil during the inflationary period? To account for an average portfolio (0.5-2M) minus RE to survive during the time period 1981-89 seems to be difficult unless like in Japan (1980's to date) a portion is invested (diversified) ...
by GAAP
Sat Aug 20, 2016 12:23 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 1: guiding principles and intent
Replies: 24
Views: 2542

Re: Withdrawal method proposal -- Part 1: guiding principles and intent

What is wrong with the traditional 4% withdrawal to start then add inflation for following years? Easy. Tried successfully. Already tested. It doesn't adapt well to extended combinations of high inflation and low returns -- no circuit breaker beyond personal comfort. Try plugging in the following n...
by GAAP
Sat Aug 20, 2016 11:12 am
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 2: Implementation
Replies: 32
Views: 3102

Re: Withdrawal method proposal -- Part 2: Implementation

LibreOffice Spreadsheet at: https://dl.dropboxusercontent.com/u/16498865/Withdrawals.ods Thanks for the spreadsheet, it makes it easier to understand your intentions around the detailed mechanics. When I use historical data and look at real (not nominal) numbers for the annual withdrawal and the po...
by GAAP
Sat Aug 20, 2016 9:51 am
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 1: guiding principles and intent
Replies: 24
Views: 2542

Re: Withdrawal method proposal -- Part 1: guiding principles and intent

Once the distribution phase begins, two fundamentally opposed objectives are in play -- maximizing portfolio growth and maximizing portfolio withdrawals. You lost me on the first sentence. Retirement is the worst time to maximize growth. Since you have to depend on this money to last your lifetime,...
by GAAP
Sat Aug 20, 2016 9:43 am
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 1: guiding principles and intent
Replies: 24
Views: 2542

Re: Withdrawal method proposal -- Part 1: guiding principles and intent

I don't understand where you are headed with number 12. I would think that withdrawals would be integrated with cash management. Or maybe you are not thinking of cash management as a cash "bucket" from which to take withdrawals during an extended down market. I'm also not sure why a withd...
by GAAP
Fri Aug 19, 2016 4:11 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 2: Implementation
Replies: 32
Views: 3102

Re: Withdrawal method proposal -- Part 2: Implementation

Have you looked at Gummy's "sensible withdrawals"? It starts off with a Bengen-style withdrawal method (setting an inflation adjusted floor) and you get a "bonus" whenever your portfolio return exceeds the inflation rate after your floor withdrawal is made. More details at: http...
by GAAP
Fri Aug 19, 2016 3:52 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 2: Implementation
Replies: 32
Views: 3102

Re: A simple retirement plan.

What am I missing? What did I get wrong? What could be improved? Any other thoughts? GAAP: I retired in June of 1982 at the age of 57. We had about a $1 million dollar portfolio to last us the rest of our lives. I didn't know about safe withdrawal rates (the Trinity Study wasn't published until 199...
by GAAP
Fri Aug 19, 2016 3:41 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 1: guiding principles and intent
Replies: 24
Views: 2542

Re: Withdrawal method proposal -- Part 1: guiding principles and intent

Something that you might want to add is that the method shall adjust to new economic conditions that didn't occur before (e.g. unprecedented low or high returns, new types of financial crisis, etc). Within reason, of course, nothing can deal with a nuclear war... Such principle was a key determinan...
by GAAP
Fri Aug 19, 2016 3:33 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 1: guiding principles and intent
Replies: 24
Views: 2542

Re: Withdrawal method proposal -- Part 1: guiding principles and intent

Something that you might want to add is that the method shall adjust to new economic conditions that didn't occur before (e.g. unprecedented low or high returns, new types of financial crisis, etc). Within reason, of course, nothing can deal with a nuclear war... Such principle was a key determinan...
by GAAP
Fri Aug 19, 2016 3:13 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 2: Implementation
Replies: 32
Views: 3102

Re: Withdrawal method proposal -- Part 2: Implementation

Either of these broad categories often come with modifications to make #1 look a little more like #2 (Kitces ratcheting method comes to mind) or #2 look a little more like #1 (various smoothing algorithms to reduce the year-to-year variation). I think I'm firmly in your second category -- trying a ...
by GAAP
Fri Aug 19, 2016 3:09 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 2: Implementation
Replies: 32
Views: 3102

Re: Withdrawal method proposal -- Part 2: Implementation

Seems complicated and yet without enough detail. I suggest you take an established method you are close to being happy with and adjust it to suit rather than trying to build something from scratch. Perhaps you missed it, but I did post a spreadsheet: https://dl.dropboxusercontent.com/u/16498865/Wit...
by GAAP
Fri Aug 19, 2016 3:03 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 2: Implementation
Replies: 32
Views: 3102

Re: Withdrawal method proposal -- Part 2: Implementation

LibreOffice Spreadsheet at: https://dl.dropboxusercontent.com/u/16498865/Withdrawals.ods Thanks for sharing. It always takes some time to get in the mindset of somebody's else spreadsheet. While I'm trying to unravel it, may I ask if you investigated the Guyton-Klinger (G-K) decision rules? This is...
by GAAP
Fri Aug 19, 2016 1:55 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 1: guiding principles and intent
Replies: 24
Views: 2542

Re: Withdrawal method proposal -- Part 1: guiding principles and intent

Those seem pretty sound principles. Item#1 is probably unrealistic though. I have been playing with withdrawal methods a lot in the past few years (same reason as yours), and I seriously doubt that you can rigorously fulfill such goal. You need to make *some* predictive assumption in order to compu...
by GAAP
Fri Aug 19, 2016 12:44 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 2: Implementation
Replies: 32
Views: 3102

Re: Withdrawal method proposal -- Part 2: Implementation

Ok, I think I understand the general idea. Well, you're clearly not in retirement mode yet, with all those work-related concepts of bonuses, promotion, etc. Even the dreaded performance review is there! LOL ... At the first glance, you seem to flunk your own goal #1 (no prediction) by assuming that...
by GAAP
Fri Aug 19, 2016 12:24 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 2: Implementation
Replies: 32
Views: 3102

Re: Withdrawal method proposal -- Part 2: Implementation

siamond wrote:You really should link your two threads, e.g. include a link to the other in each first post.


Sorry about that -- done.
by GAAP
Fri Aug 19, 2016 10:51 am
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 2: Implementation
Replies: 32
Views: 3102

Re: Withdrawal method proposal -- Part 2: Implementation

Dutch : What about not running out of money? Or protecting your accumulated wealth by taking less risk? I'm not sure that maximizing portfolio growth should be one of the two guiding principles for a retiree in the withdrawal phase. I don't see growth as a principle, since it's not a fundamental ba...
by GAAP
Fri Aug 19, 2016 10:38 am
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 1: guiding principles and intent
Replies: 24
Views: 2542

Re: Withdrawal method proposal -- Part 1: guiding principles and intent

bertilak : Might there be some part of your portfolio that you should never withdraw from? Sort of a family legacy. It's not yours, but you are currently responsible for it. Interesting -- that effectively gives me a fiduciary responsibility to my heirs. A much higher standard. That seems to be the...
by GAAP
Fri Aug 19, 2016 10:03 am
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 1: guiding principles and intent
Replies: 24
Views: 2542

Re: Withdrawal method proposal -- Part 1: guiding principles and intent

truenorth418: Do you intend to leave a bequest - maximizing residual left to heirs upon your death? I think that is partially a result of #4. If it has to last indefinitely, there will be something left over. I'm not really trying to maximize that value, but I am assuming that it needs to continue ...
by GAAP
Fri Aug 19, 2016 9:37 am
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 2: Implementation
Replies: 32
Views: 3102

Withdrawal method proposal -- Part 2: Implementation

Once the distribution phase begins, two fundamentally opposed objectives are in play -- maximizing portfolio growth and maximizing portfolio withdrawals. A successful withdrawal strategy is key to optimizing the interplay between those objectives. Since I am within around ten years or less of retire...
by GAAP
Fri Aug 19, 2016 9:31 am
Forum: Personal Finance (Not Investing)
Topic: Withdrawal method proposal -- Part 1: guiding principles and intent
Replies: 24
Views: 2542

Withdrawal method proposal -- Part 1: guiding principles and intent

Once the distribution phase begins, two fundamentally opposed objectives are in play -- maximizing portfolio growth and maximizing portfolio withdrawals. A successful withdrawal strategy is key to optimizing the interplay between those objectives. Since I am within around ten years or less of retire...
by GAAP
Fri Apr 22, 2016 8:10 pm
Forum: Investing - Theory, News & General
Topic: Did TIPS Really work?
Replies: 41
Views: 4405

Re: Did TIPS Really work?

If and when unexpected inflation rears its wealth-destroying head again, we suspect their value above nominal bonds will become apparent. We prefer to hold TIPS by policy, because unexpected inflation by definition cannot be predicted. Constantly having under-performing asset classes in your portfo...
by GAAP
Fri Apr 22, 2016 12:53 pm
Forum: Investing - Theory, News & General
Topic: Did TIPS Really work?
Replies: 41
Views: 4405

Did TIPS Really work?

I've never been a fan of TIPS -- I have trouble believing that a periodic after-the-fact adjustment for inflation will outperform daily market adjustments. However, a lot of people who know far more than I about this seem to think they make sense, so I tried to prove myself wrong -- unsuccessfully, ...

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