Bogleheads.org

Circe wrote: ↑Mon Mar 20, 2023 7:31 pm The only ones I liked were the RAV and the Outback. I had a 2006 Forester that was great and a 2016 Forester that I did not like because of how it handled. I now have an Outback. The Subaru batteries are bad (you get 2 free replacements!) but otherwise a pretty good car. Check out owners' forum where you can get questions answered.

A person may do better replacing those batteries with an AGM type from one of the battery companies. I use an Interstate MTZ-34 in the Outback. It does fit even though they say officially it does not fit.

Let’s just concentrate on my VWIAX situation. If the market value of my holdings in VWIAX is $1,000,000 January 1 and I receive $58,000 in dividends during 2023 that $58,000 will not contribute a single dollar of additional growth to that $1,000,000 no matter the stock price into the future, correct or am I missing something? If on Jan. 1 your VWIAX is valued at $1m, the value of the fund should grow during the year to $1.058m to accommodate the dividends that have been accrued from the stocks and bonds it owns. When the dividends are paid by WI, your fund's value would decrease back to $1.0m. If you reinvested those dividends back into WI, its value goes back up to $1.058m. If you do not reinvest them, you have WI worth $1.0m and cash wor...

So now I am beyond confused. I thought it was settled that dividends do not provide any real benefit. This information turns all that on its head. I am now being told if the fund pays $58,000 in dividends my holdings increase by $58,000. Both scenarios cannot be correct. What is settled is that sorting funds on the dividend yield does not predict a greater return. Some investments deliver a larger part of the return in dividends and less in share price increases that are in addition to dividends. Some investments can deliver the same return in capital appreciation and not in dividend. In the example above there was no capital appreciation after dividends and all the return was in dividends, obviously of great value. A different investment ...

So now I am beyond confused. I thought it was settled that dividends do not provide any real benefit. This information turns all that on its head. I am now being told if the fund pays $58,000 in dividends my holdings increase by $58,000. Both scenarios cannot be correct. What is settled is that sorting funds on the dividend yield does not predict a greater return. Some investments deliver a larger part of the return in dividends and less in share price increases that are in addition to dividends. Some investments can deliver the same return in capital appreciation and not in dividend. In the example above there was no capital appreciation after dividends and all the return was in dividends, obviously of great value. A different investment ...

FYI my investing is completely covered by VTI (total stock market US), VXUS (international stock index), SWRSX (intermediate TIPS fund), and the cash in the checking account. I use the Schwab TIPS fund because that account is in a Schwab brokerage link in the 401k and it is lower cost than the Vanguard fund.

The biggest issue that one has to weigh when considering whether to enter into an Advisory relationship or to stay in an Advisory relationship is the ongoing fees. I work in tax preparation and as I look at client 1099 statements from their brokerage, I am amazed at the fees that people pay. It really adds up, particularly when the portfolio balances get larger and larger. I actually am pro-Advisor and still believe that most people would benefit from an Advisory relationship. However, the ongoing fees can be pretty high and over time it is a big drag on returns. The question is whether the benefits received are worth the costs paid. You are paying $20,000 to $22,000 a year and that is a lot. I think you said you were paying 1.1% a year in...

Prudence may warrant keeping 2 or 3 years of living expenses liquid and readily accessible in an income producing account. In fairness "prudence" in terms of 2 or 3 years in cash in an "income producing account" has only been heard of frequently around here recently, really during the last year or so. An emergency fund as always been popular, but more in the sub-year range, even for retirees. And of course in the CFG we had all kinds of discussions about low-percentages of equities, but it was almost always bonds that were on the other side of that. If we see a few more consecutive years like 2022 your post would probably read 5 or 6 years of cash-like investments, and I'm not being critical at all, I'm just saying that...

Comparisons of Vanguard's bond funds VBTLX (0.5%) total bond vs VBILX(0.7%) have come up before. Currently, they both have the same Yield to Maturity but the VBIRX has a shorter duration. This seems to make the VBIRX a better deal. Your thoughts? Is there any guidance on how to split one's bond portion of a portfolio between the two? How did this question come up? In general the choices in bond funds lie on a line of credit risk (Treasuries zero to junk bonds high), duration (short, intermediate, and long), and nominal vs inflation indexed (TIPS). Trying to choose within the same rough credit, duration, and inflation risk is tilting at windmills. Probably picking the right duration (first), inflation index (second), and credit risk (third)...

No way would I hold an array of funds like that. VPAS should not do that to someone either. This does not mean the ultimate distribution of assets has anything wrong with it other than pointless complexity. Therefore you could continue to pay 0.3% and stay there if for some reason you like letting someone else run things. The one dilemma is with taxable investing. If you stay with those investments then over time they may accrue sufficient unrealized gains that it is expensive in tax costs to sell and change things around. You may be able to do that now at minimum costs or even harvesting tax losses to your advantage. How confident you are in understanding what to hold and how to hold it and to continue to manage on your own is for you to e...

Thanks, Dave. So the APY assumes compound interest but if interest is paid outside of the CD before maturity the actual APY will be less than stated. It sounded like that was the case but I wasn't sure how it worked from a calculation standpoint. The result depends on what you do with the interest payments between payout and the end of the CD term. If you spend them, then the accounting could be that they are withdrawals. You could reinvest them in something and consider the asset to be the CD plus whatever holdings the interest is then invested in. In any case there is a difference between yield on a fixed income investment and your ultimate return on the money you invested when the process is complicated by cash flows during the term of ...

Markr867 wrote: ↑Sun Mar 19, 2023 8:40 am
Absolutely understand, and I hope that they too have 15-20 more years (or more) to recoup their losses and make money on their investment. The fact that I inserted myself at all was because I felt that they were being taken advantage of by this neighbor and I didn't want to see them being swindled.

I think I would not use the language "recoup their losses." It is the nature of the beast that value of investment assets rises and falls yo unpredictable degrees at unpredictable times. You just live with the rise and fall. The enterprise is worthwhile because there is an underlying upward trend to be expected. Where that trend ends up is an uncertain proposition except that the expectation is that the average of it is good.

VASIX is appropriate for a conservative investment for people looking at a 15-25 year time line, which a person at age 70 probably would be looking forward to. An investment like that is not appropriate for a 2-5 year timeline. Put differently, you don't judge an investment like that by looking at performance over a timeline of only a few years. But the real question is what your parents want and expect from their investment. "Getting more return" is not the only objective in investing. In this case they may have understood the stocks but you were all unprepared for results in bonds, which in all fairness have been extreme. Bonds do by their intrinsic nature recover, but not so quickly as in a couple of years. And then the future ...

All assets you own are by definition part of your portfolio. You are entitled to your own opinions but not your own facts, i.e. you're not entitled to your own definition of words. You get to choose what's in and out. For example, some folks might set aside 300K house DP outside of portfolio. Nothing wrong with that, as they don't want to rebalance their house DP. Of course you can consider the management and results of any aggregation you want to think about. As you say there can be good reasons to look at one set of assets in a different context from another set of assets. It might be counterproductive to do that arbitrarily without attention to why you are managing that way. One of the peculiarities of my definition is that I count the ...

And yes, yes, yes, I understand sequence of return risks. I had them. 50% drop right after retiring. That is an interesting example. 2007 had one of the worst two year starts exceeded only by 1973 and 1930. Yet by 10 years in 2007 was above the worst 25% We have yet to see what is next for that retirement year. It is true that if one had skipped up to 2008, then in the first ten years one would be above the 75th percentile in outcome, even though 2008 had one of the worst first years. One should realize though, that this is not a matter of choosing to delay retirement to a better year. A person picking 2009 instead of 2007 will now have seen the money he has to retire on destroyed as much by 2008-2009 whether retired or not. It does say th...

If you're retired, which safe withdrawal rate (SWR) has allowed you actually to grow your nest egg, inflation-adjusted? This response will make me sound like a simpleton compared to the entries above, but all I did was review my spending for the 2 years prior to retirement to get a sense of what I'd need. Then, I set all the dividends in my taxable portfolio to go to my settlement fund. I've been using that money ever since. Every once in a blue moon I have to sell something, but it's rare. This has allowed my tax-deferred and Roth accounts to continue to grow. Even my taxable account has grown, but at a slower rate than it would have, had I not been taking the dividends. Regards, On the contrary there is a difference between models for di...

If you're retired, which safe withdrawal rate (SWR) has allowed you actually to grow your nest egg, inflation-adjusted? And how about the future? Do you have any plans to change your SWR? A quibble is that you mean your withdrawal rate. SWR, the withdrawal rate that is safe, is a calculation you don't choose. Asset allocation? I'd like to compare your experience with my plans for an SWR. Of course, in my planning, the withdrawal rate has to be adjusted upwards when required minimum distributions kick in, and that makes portfolio growth particularly difficult, as it is supposed to, I suppose. I guess I'll repeat that an RMD is a distribution of money from one account to another and is not a portfolio withdrawal. The effect it does have is t...

Between 2001 and now you got a CAGR of 7.5%. Between 2011 and now you got a CAGR of 11.7%. From 2011 to 2020 a CAGR of 14%. Along the way you had to endure drawdowns of 51% in 2009, 37% in 2002, 25% in 2022, 21% in 2020, 15% in 2018 with rapid recoveries in between. The total stock market was very good to investors that have held it over the last 2-3 decades and who retired in those times. You could have eschewed stocks and gotten a CAGR of 3.5% in total bond, better than inflation by a tad but not so good for a successful retirement. This is not to suggest that volatility does not matter nor that stocks can have secular periods of poor returns. It does mean there is a balance between stocks and bonds and that investing is a risky long game.

This is mostly dependent on when you retire. Retired folks that are still participating here mostly retired after the GFC of 2008, so have had a much more pleasant ride than folks that retired in 1929 or 1966, meaning you won't learn anything from this question. A couple other resources to check out: Go to EarlyRetirementNow and download the SWR toolbox, which is a Google sheet with historical series and SWR calculations on a monthly basis back to 1871. Or check out FireCalc, which is an online calculator that is quick way to see how your starting values would fare if various historical returns played out in the future. Good data sources. Note those approaches like the original work by Bengen and the Trinity study are all tabulations of ac...

If you're retired, which safe withdrawal rate (SWR) has allowed you actually to grow your nest egg, inflation-adjusted? And how about the future? Do you have any plans to change your SWR? Asset allocation? I'd like to compare your experience with my plans for an SWR. Of course, in my planning, the withdrawal rate has to be adjusted upwards when required minimum distributions kick in, and that makes portfolio growth particularly difficult, as it is supposed to, I suppose. Thanks. Experience for retirees starting in 1871 to today is tabulated here: https://engaging-data.com/visualizing-4-rule/ You can enter a starting portfolio value, asset allocation, amount of annual spending and number of years you want to look forward. The output will be...

JiggsJazzCar wrote: ↑Fri Mar 17, 2023 10:26 am For a youngish investor with the stomach for risk and the need to grow your principal is there any reason to not just do the 3 fund portfolio and forget it?
At least with the part of your portfolio that you wouldn't need for 7 years or more?

I would agree with that. All the buying and holding CDs, bond this, bond that, etc. is perfectly fine if that is what a person wants to do, but it is not necessary or even necessarily better. And, yes, if you have a need to recover a specific amount on a specific date or to be sure a fixed amount will always be there exactly then you choose investments that meet that definition.

I am trying to understand the treasury products a bit more. I have done some reading and I have some Ibonds for now. After some research I think the Ibonds and Tbills are what interests me the most. From what i can make out, here is what i can summarize - I-bonds are some what of an alternative to holding plain cash. you r going to be at inflation rate or slightly better with I-bonds I bonds are effectively real asset cash. This means they behave like cash except the asset real value is maintained instead of the nominal value. There are some conditions that are not cash like, namely the one year no withdrawal period and the five year interest penalty, and there is a not cash like benefit in the 30 year tax deferral of interest income. I bo...

I don't think "lazy" means that you just go away and forget everything for 20 years. That would be a Rip van Winkle portfolio which is not recommended except in the case of bourbon where the 23 yr is recommended. It doesn't make any sense to use an asset allocation method of managing investments and then not rebalance. How often to rebalance is a different question to which the 5% bands approach is reasonable. As to practical, it is a big mistake to not stay involved with your accounts to be up to date on access, on changes that might come down from the management, and to verify there is no mistake, hacking, or other untoward event. There are even reports of very rare instances of people's assets escheated as abandoned assets if t...

So is the conclusion that these nefarious warnings are popping up because Vanguard can't figure out what is even in their funds?

G fund is a fine choice.

A decision between 70/30 and 80/20 is not a meaningful choice and what fixed income your pair with either asset allocation is not a meaningful choice.

If there is a theoretical indication of best pairing for 70%+ stocks it would be long Treasuries. But obtaining a true diversification benefit needs a high returning, high risk partner like long bonds and not a lower risk if efficient partner.

I rather imagine G fund and an 80/20 portfolio will be fine for you if 70/30 and total bond was fine. So would 70/30 with the G fund and 80/20 with total bond.

Three months expenses is penny-ante or will be before long. Of course you can place that or some of it in a money market fund. The longer term significance of where you keep that little bit of assets is nil. By the same token not being FDIC insured or some other nuance is also nearly irrelevant. I am fortunate to be retired with reasonable assets and it doesn't bother me in the slightest to have a couple or three months spending in a checking account that pays nothing. The arrangement is a convenient way to manage in and out flow of cash with minimum bother. An emergency fund might be just as conveniently separated into a savings account or a money market fund whether it pays anything or not. Once you get to 20%-25%-30% of your assets in &q...

ForestWolf wrote: ↑Thu Mar 16, 2023 4:46 pm My question is -- can I call the broker early tomorrow to cancel this new policy?

You can call the broker and find out what can be done.

As far as I know any medical insurance policy can be cancelled at any time. What you will have after you do that is a different question. Do you mean you still have a different Medigap policy or that you will now need to make a different choice to buy. You will have to ask if you are still in the enrollment period, whether you will need medical underwriting or what.

The use of a broker is to assist you through these things.

Wellesley is about 65% bonds. Most of the dividends paid out would be interest paid on bonds held. Are we saying that dividends from a bind fund are worthless? Or are we just talking about the portion of dividends derived from dividends paid by the stocks held? I'm so confused Dividends are part of the return whether stocks or bonds. Dividends per se are certainly not worthless. A consideration is that the payment of a dividend forces you to make a choice what to do with it. If you reinvest the dividend then your assets will continue to grow in proportion to what fraction of the return in that period of time is carried by the dividend. If you don't reinvest the dividend in something in your portfolio, them you have made a withdrawal and yo...

That’s not being picky. That’s a big deal. The act of issuing and reinvesting dividends offers no value no matter what occurs with share price at no times into the future. Why doesn’t every article regarding dividends just say just that? “Dividends are a worthless accounting calculation that offers no value to the shareholder”. Instead dividends are presented as a big deal. Don’t get it. OK I am going to violate my rule and add some reasons both good and bad someone might like dividends. 1. They think dividends are free money and the dividend investment grows as fast as the non-dividend investment while also paying dividends that the other investment does not. This is stupid and most investors who like dividends don't think this. Occasiona...

If identical in every way means that they have the same total return, the NAV of the low dividend fund will grow at a faster rate - so less dividend means more capital gain. Tax may have to be paid on that extra gain eventually. (You could donate appreciated shares or leave them with step-up in basis on your death. You might also get into the 0% LTCG bracket in retirement.) Deferring the taxes is worth a bit compared to paying every year. The cost gap is narrower than your example. I agree it gets tricky to understand the tax cost taking into account the variations in timing. This seems to be analogous to thinking of the gains in NAV as being tax deferred liability but the dividends are taxed now. You are right that to really bring this in...

rkhusky wrote: ↑Thu Mar 16, 2023 12:46 pm

dbr wrote: ↑Thu Mar 16, 2023 8:28 am I would take such messages as garbage and also as an insult.

Why an insult? Vanguard doesn’t know all my holdings, so their portfolio alerts are irrelevant, but hardly insulting.

That is how I see it. Other people don't.

VWIAX is my main retirement vehicle. It’s performance over the last 50 plus years is hard to fault. Only seven or eight down years. The dividend payout is significant. I roughly estimate that that I will get back via dividends almost exactly what I will be taking out at least this year. I know this may be a mute point in my situation where it all pre tax $. Regarding dividends. I am still cloudy regarding their benefits with my situation where all the funds in VWIAX are pre tax. One question I have is will there be a benefit once VWIAX stock price returns to historical highs? In other words I am reinvesting all dividends back into VWIAX and taking monthly $ to live on. The shares I take will be replaced more or less via this dividend reinv...

Not all stock funds are weighted at the market other than a total market fund itself. That would be true if you feature a value fund or a growth fund or a dividend fund of some kind. Here is VVIAX: Basic Materials 2.30% Consumer Discretionary 5.10% Consumer Staples 10.80% Energy 7.80% Financials 20.10% Health Care 19.00% Industrials 13.90% Real Estate 3.10% Technology 8.00% Telecommunications 3.90% Utilities 6.00% Here is VWUAX: Communication Services 9.80% Consumer Discretionary 19.00% Consumer Staples 3.00% Energy 1.30% Financials 4.00% Health Care 14.70% Industrials 5.50% Information Technology 41.00% Materials 0.40% Real Estate 1.30% Why they take it upon themselves to warn you is beyond me. I would take such messages as garbage and als...

If by index fund you mean investing in stocks, then a better answer is to think through what allocation you want between stocks and bonds, buy that allocation, and stay there. It is really hard to position investments for what you guess future returns are going to be. There are also bond index funds. It could be a reasonable question whether or not you want to hold fixed income in CDs or in bond funds. An opportunity available in bond funds or in individual bonds not available in CDs is for the instrument to be inflation indexed. That may or may not be helpful to your plan. A good baseline for stock index funds is total market index funds, US and International. You can begin and end there and ignore the other couple of tens of thousands of ...

If so, can you say more about that? Is the "buy-low-sell-high" mantra not part of the BH ideology? "Buy low, sell high" is a logically self fulfilling strategy and thus just circular reasoning or proof by assuming the conclusion. The real problem is how to buy low and sell high, and that problem is a whole different kettle of fish. BH should be taken as helpful practical advice, neither a mantra or an ideology. As such lots of thoughts can be discussed on the merits. Probably a common thought here is the idea of setting an asset allocation suitable to your objectives and staying with it over long times, rebalancing if necessary. People can and do propose alternate investment constructions or tactics which can be conside...

However, my concern is that doing so *now* would violate the primary "buy-low-sell-high" mantra of investing. Stock value is somewhat low, while TIPS fund value is at or near historical highs. Offhand, there is not likely any specific advantage to you in changing a 60/40 allocation for a 40/60 allocation just because you are nearing retirement, but if you would be more comfortable with less in stocks you could do it now. An interesting picture of what has happened in retirement at different withdrawal rates and asset allocations is here: https://engaging-data.com/visualizing-4-rule/ That model and other historical models don't drill down to detail such as TIPS vs nominal bonds because TIPS have not been around very long. It is an...

I agree that many investors become, in my opinion, irrational when face with negative returns, but it is all a question what the options are. We not privileged characters and the market never promised us that we would always be able to get a positive real return in all circumstances. Of course what makes it difficult is that over any given past period of time it is almost always possible to find investment which would, in hindsight, have given a positive real return, but that's not at all the same thing as getting a guaranteed positive real return going forward. If you sit down with a retirement withdrawal model like FireCalc that just projects the outcome from taking money from a store of investment wealth at some rate while assets are ex...

I was just poking around out of curiosity on the brokerage site and decided to look at TIPS on the secondary market. The top offerings were negative yield, how can that benefit someone? ( I don't buy TIPS, so this is a basic question, probably needs a basic answer) The benefit is that the bond is inflation indexed. The nominal return comes from the coupon, which these days is small, maybe 3/8%, from the premium or discount for the purchase, and from the inflation adjustments. The real return comes from just the first two. It is not uncommon for bonds to have negative real yields. At 4% nominal and 6% inflation a 4% bond has negative real yield. Today TIPS actually have positive real yields and much larger nominal yields than 4%. The proble...

I have always worked for small employers and have found that most have no idea how much the plan administrator is charging their employees to run the plan. It seems like I was the only employee to ever ask this question. We had a few choices of cheap index funds but had administrative fees of about 1%. They did their best to hide them. As soon as I was able I always moved my money to an IRA. Having to use a backdoor Roth was not a concern. Right. It is a scandal actually and one might think it should be criminal for financial services companies to profit from the primary retirement savings means offered American employees under the auspices of US tax code. Better plans in large companies often include the employer subsidizing the cost and ...

Yes, many folks would benefit from reading the Pfau/Cooper paper. If nothing else, it explains what's behind many of the back-and-forth arguments here. (Instead of talking past each other, we might say, "Oh, you are a Safety First person and I'm on the other end of the spectrum. That explains why we can't convince each other our plan is better.") It provides a structured way of thinking about "people are different". Good points. I think it would help any investor to be clear with himself regarding how he is framing investing and therefore setting the objectives. This also makes it easier to avoid nonsensical rationalizations for choices one makes while focusing on real reasons why one prefers one thing or another.

I asked this question because I thought there was a boglehead philosophy on this but after reading the wiki and stickies, I didn't see anything about this Things like this do not rise to the level of philosophy. If you want points of philosophy that might be related it would be in the areas of keeping costs low and taking appropriate risk. Those are fits or not fits for any particular 401k or IRA according to the details. I myself have a better taste for where I could put an IRA than I have for the people who run the 401k but we are not moving because liability protections for IRAs are not good in my state. That is an issue of practical fact and not of philosophy. The actual investments are ultra low cost and in the preferred assets already.

Artsypenguin wrote: ↑Tue Mar 14, 2023 7:17 am

As a side note, unrelated to this question, I got the prospectus for BND and saw a 1% Yearly 10 year return and began to question why I hold bonds at all (I'm 26)

Look at your objectives. Look at the risk and return over time presented by the different assets you can own. Where is the best match, all things considered for you?

I'll agree on generally preferring higher non-marketable rates, with limited further consideration. For marketable rates I tend to question if an "all else being equal" condition likely applies with substantially different rates, such as the original post. Presuming markets might contain some information, there's a possibility that significantly higher market yield may indicate non-matching conditions or risks. I suspect there may be additional reasons why rates could change beyond inflation, for example some elements of social trust might appear in market rates. Basically I have reservations if a market accepting 4% likely shares similar conditions or opinions about risks as the same market trading at 14%. I consider a possibili...

There is a handful of states where IRAs do not have the (or as much) liability protection in non-bankruptcy lawsuits that a 401k has. If you live in one of those states there is a good reason not to roll money into an IRA.

https://www.assetprotectionplanners.com ... -by-state/

Also, with regards to the comment from exodusNH I recently heard a good line from Derek Tharp on the Long View Podcast. He was quick to say what happened over one year (last year for instance) is not technically sequence of returns risk. Sequence of returns risk deals more with a mutliyear long series of underperformance while making withdrawals from which your portfolio may not recover. One year isn't really a sequence. We could recover quickly (or not) from that one year negative (for bonds AND stocks) period of time. Time will tell. Exactly so. The math is to note that for the same average return over a period then when there are contributions or withdrawals the sequence in which returns occur affects the outcome. That is not true if th...

Yes the trinity study was trying to look at portfolio survival over various time periods with varying allocations and amount of withdrawals. You can see with a 4% swr i believe there was still a 5% chance of failure over 30 years (said in the inverse, a 95% success rate). A study like that using a finite and limited number of data points can be 100% successful and is if the withdrawal rate is dropped just a little, maybe 3.8%. But that isn't meaningful. That 0% failure just comes from running out of data. For that reason it may be conventional to arbitrarily set the definition of SWR at 5% failure so that one is actually sampling something that has failures. After all if 3.8% runs out of failures, then what would it mean to say that 2% als...

Yes, and because CAGR is compound annual growth rate the effect on the end result requires this to be compounded.

1.06^30=5.74
1.05^30=4.32
1.04^30=3.24

You could search for LMP (liability matching portfolio) and consider buying individual tips held to maturity now since they are the best rate they’ve been in the past decade. It might not be the highest return but worth a look — some do as a bridge to social security at 70 (so would buy to mature from say 58-69 for your basic expense needs. If held to maturity you don’t have to worry about interest rate fluctuations. It is a way to lock in the current good rates. Interest rates may get better or worse but BND is 6.6 years average duration you aren’t locking them in now like you would with longer term tips. This is an example perhaps not of buying "low" but of getting a higher income stream at a lower cost, hence buying "low&...

Bond price and bond yield are mathematically inverse. In that sense one is buying low.

Interest rates are notoriously difficult to predict and time. In that sense I would probably say you are on your own if you are trying to decide when to change an asset allocation. The best advice over all probabilities is that if a different asset allocation is indicated, then you should just do it. It will always be possible after the fact to chalk up that you were lucky or unlucky.

Note you have the exponentially more complicated problem of simultaneously timing both stock and bond assets. Your chances of getting this mostly right are nil.

In general the more you concentrate your assets in nominal cash the more money you need to have saved to make sure you still have something if you live a long life and considering inflation. A more effective management of these risks can, in general, be obtained by allocating perhaps 30% to stocks and holding inflation protected fixed income such as TIPS and I bonds. A component of a good defense against running out of money is a modest withdrawal rate and sensible anticipation of what your expenses will be.

You can be significantly benefited against these risks through Social Security and perhaps pensions or single premium immediate annuities, though the latter are not sold with CPI COLAs but may have fixed cost of living increases.

Does this mean that an investor could potentially gain an extra 10 spending years by choosing an index fund with an expense ratio of 1% instead of a fund with an expense ratio of 2%? How might an investor calculate these gains ahead of time? For example, to calculate the effect of expense ratio on time to retirement, could one simply plug in a 1% greater "Annual return on investment" in this Early Retirement Calculator ? Yes. Another way to account for AUM is to tally it as a withdraw and spend, which it is. If you have a portfolio and were not taking any withdrawals, you have neglected that the advisor is in fact withdrawing 1% of your portfolio every year. If you are taking withdrawals, don't forget to add the AUM to your withd...