How Have You Planned for Sequence of Return Risk (SOR)?

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cognovimus
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How Have You Planned for Sequence of Return Risk (SOR)?

Post by cognovimus » Sun Aug 25, 2019 4:13 pm

I've been reading about the "strategies" for managing/protecting against SOR Risk. Many of you know of Wade Pfau, who is listed as "Professor of Retirement Income." One of his articles is linked here: https://www.forbes.com/sites/wadepfau/2 ... fafa186fcf

Some of this is pretty common sense, but all the suggestions seem to have their drawbacks. I'm most interested in hearing from folks who retired in the 2005-2009 time frame, right in the middle of or before the Great Recession.

For example,

1. Maintain a cash buffer. How much cash, in terms of # of years expenses, considering a couple of additional years in which we'll want to minimize taxable income due to private (ACA) health insurance purchases. If it's normally 2-3 years and I add a couple of extra years for to cover the ACA years, that's a lot of cash sitting in 2% (if I'm lucky) accounts. So if I actually put 5 years of expenses in my bank accounts, what should the rest of my AA look like? Pfau also suggests a reverse mortgage and/or access to CVLI as an alternative to the cash drag of actual cash. Is anyone using that strategy?

2. Spend conservatively (especially if AA is aggressive). This "strategy" isn't all that helpful and may involve pain with no gain. Pfau concludes there is no safe withdrawal rate, particularly if spending is inflation-adjusted. It may also be difficult for new retirees who have the health to be more active, travel more, while they can.

3. Maintain spending flexibility. Be prepared to reduce spending after a portfolio decline and don't inflation adjust. To do this, you must have some "fluff" in the budget that you are willing to forgo if there is a market downturn. This may also render new retirees less able to engage in active (but sometimes expensive) lifestyles in their 60's. What % of your retirement budget could be trimmed if necessary to wait out a recession? Would this have a meaningful negative impact on your lifestyle for those X years?

4. Reduce volatility to reduce or eliminate SOQ risk. Here Pfau mentions how defined-benefit pensions help with this (but that's not really a tactic you can choose at the just-prior-to-retirement juncture), annuities (which seem very stingy in today's interest rate environment), and the "rising equity glide path" which his research shows helpful in a market downturn. Other studies show the inverse, and it probably depends on the specific conditions you personally encounter in those first few years of retirement. How have you reconciled your desire for optimal returns with the suggestion to reduce volatility? How is that reflected in your AA? Are you on a rising equity glide path or a declining equity glide path in retirement? Would your decision be different if you were retiring in 2020?

5. What else has worked for you? Looking for lived experience as well as stats.

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David Jay
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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by David Jay » Sun Aug 25, 2019 4:36 pm

cognovimus wrote:
Sun Aug 25, 2019 4:13 pm
1. Maintain a cash buffer.
Of course, it doesn’t have to be “cash” to deal with sequence-of-returns risk. It needs to be “non-equity” and perhaps not LT bonds.

When I retired, I had enough in bonds to get from age 62 to age 68 which is at the low end of my retirement range (68-70 is the range). I keep 2 years in ST bonds as a buffer against sudden interest rate increases and the remainder in IT bonds.

[edit] I see you did not mention a more conservative Asset Allocation. Moving to a more conservative AA provides more fixed assets by definition.
Last edited by David Jay on Sun Aug 25, 2019 4:38 pm, edited 1 time in total.
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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by livesoft » Sun Aug 25, 2019 4:37 pm

I am doing almost the opposite of what you listed.

1. No cash. Period.

2. Not spending conservatively unless you mean spending less than 4% and above of portfolio value.

3. Don't worry about flexibility nor inflation because inflation doesn't affect me as much as articles seem to suggest. I don't have to be flexible on spending as far as I can tell.

4. I love volatility, but I do realize that it probably costs me money. I just consider it as part of the fun of investing.


5. What works is having a big huge portfolio to start with. That is, don't retire as soon as your portfolio just ever so barely meets some pre-conceived idea of what will barely work if one does all kinds of planning. The most simple plan is to just have so much money that it doesn't matter.
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Leif
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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by Leif » Sun Aug 25, 2019 4:44 pm

Not specifically for SOR. However, I saved in a CD ladder that kicked in at retirement to carry me until 70. That allows me to wait for SS and RMD, and do some Roth conversions, without the need to touch the other parts of my portfolio. Those are all set to reinvest.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by EnjoyIt » Sun Aug 25, 2019 4:56 pm

@livesoft, 12+ years on bogleheads with 65,000+ posts has taught him that having more money will decrease the risk of running out of it. He is not wrong.

I think the next best way of combatting sequence of return risk is to decrease your fixed expenses as low as possible (no debt) so that when the big one comes, your human nature will have you cut back a little and you will turn out just fine.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by randomguy » Sun Aug 25, 2019 4:57 pm

1) Does almost nothing. Having 5 years in cash instead of invested in bonds doesn't change you results. Leveraging up by taking out a loan might help or hurt depending on what happens. You are increasing your expenses (i.e. have to pay back that loan) and are counting on the returns being high enough to help

2) Yep the less you spend, the less you care

3) same as 2. Just remember we aren't talking about cuts for a year. We are talking about cuts for a decade.

4) Annuities historically have just give you the worst possible results which really doesn't help with SOR. A couple buys an annuity at 65, and they get 4% real. A couple at 65 invests and they get 4% real.

It is important to remember that SOR isn't a couple years of volatility. It is a decade+ of low returns. The 2007 retirees are likely to be fine with the high returns over their first 10 years. The 2000 should be fine but a decade of low returns over the first decade still gives them a decent chance of failure.

In the end their isn't much you can do to generate returns (no real estate isn't guaranteed to have positive returns when the markets are down. Same thing with gold, futures, international stocks,..) so the only option you have is to reduce spending. You can't do a ~6% SWR that is the most probable outcome and instead have to go for the worst case of down around 4%.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by steve roy » Sun Aug 25, 2019 4:58 pm

Yes. Our AA is 30/70, we're in early retirement and spending below our cash flows of pensions, RMDs and SS.

So we're good!

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by dbr » Sun Aug 25, 2019 5:07 pm

The surest plan to avoid sequence of return risk is to use your money to buy an inflation indexed annuity. Your Social Security benefit is already effectively such an annuity. There are many reasons an annuity might not be desired but one does no anticipate putting everything in an annuity. A variation on an annuity such as a TIPS ladder may perhaps be considered. Note today an inflation indexed annuity pays out about the same 4% that a portfolio investment pays out in the worst case. Planning for SoR risk can also be an exercise in shooting yourself in the foot.

Adhering to a 4% "safe" withdrawal rate is also a plan for avoiding sequence of return risk. The 4% number comes from considering the worst cases of low returns and/or bad sequences of returns (two different hazards). One can take this to the extreme of reducing the withdrawals even lower. At some point one enters the territory that with enough wealth one can do anything and not worry about it too much. Inflation indexed annuities and TIPS ladders also are expensive when interest rates are low.

VPW is a method that explicitly tries to optimize withdrawals as information concerning the returns comes in. Some people don't like having to toe to a variable rate of spending dictated by the model, but it is an innovative way of looking at the issue. If nothing else VPW does not convince you to attack the problem by abandoning return altogether.

It is not clear how effective the "bond tent" really is for dealing with this issue. See above and below.

Note that all techniques for reducing SoR risk also result in reducing returns and therefore wealth and spending in the long run.

I think there is an exaggerated level of alarm about sequence of returns risk. Not very many people are going to wager their retirement income on a 100% stock portfolio subject to all kinds of fluctuation compared to a reasonable diversity of stock, bonds, pensions, annuities, Social Security, owning a home or even holding some real estate investments, and so on.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by Watty » Sun Aug 25, 2019 5:19 pm

cognovimus wrote:
Sun Aug 25, 2019 4:13 pm
5. What else has worked for you? Looking for lived experience as well as stats.
One thing that really helps our numbers work is having a paid off house in retirement.

It helps that we live in a medium to low cost of living area and have a pretty middle class lifestyle compared to some people here but with a paid off house once we both start Social Security that will be enough to pretty much pay our core retirement expenses for things like food, utilititles, Medicare supplements, and property taxes.

Having a paid off house has a couple of big advantages;

1) Not paying rent or a mortage payment makes your spending lower which reduces your sequence of returns risk.

2) It makes our other spending a lot more flexible.

3) It will put us in a very low tax bracket. An over 65 couple can have $35K in Social Security and $25K in taxable income and pay almost no federal taxes. At least around here an over 65 couple with a paid off house can live a good middle class lifestyle on that.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by Sandtrap » Sun Aug 25, 2019 5:24 pm

livesoft wrote:
Sun Aug 25, 2019 4:37 pm
. . . . . .
5. What works is having a big huge portfolio to start with. That is, don't retire as soon as your portfolio just ever so barely meets some pre-conceived idea of what will barely work if one does all kinds of planning. The most simple plan is to just have so much money that it doesn't matter.
+1
Always the "elephant in the room", rarely mentioned.

j
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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by dknightd » Sun Aug 25, 2019 5:40 pm

There is no right answer to this. I'm going to reply anyway, even though I did not retire during the last bear market. I just recently retired. And we may or may not be facing a period worse than anything before. Plan for the worse, hope for the best.

I plan to buy an SPIA that combined with SS (when I claim at 70) will cover the costs of living a comfortably enough life. The money to buy that SPIA is in "safe" investments. By safe I mean some short term bonds, some money market, some "stable value", some CD's. I expect "safe" returns will more or less match inflation. So in real terms they will gain nothing. I hope I am right.

I have enough in safe investments to cover me from 61 to 70. As long as those investments keep up with inflation, we'll be OK.

After I've bought SPIA, and covered our expenses till SS, we'll have about 1/2 of my savings to spend between now and when we die. I plan to leave those in a more or less traditional 50/50 mix. Since our basic expenses are probably covered, this will be our "flexible" spending account. I like to think our SOR risk is confined to extras, and we can be flexible about that.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by BarbBrooklyn » Sun Aug 25, 2019 5:53 pm

I am a newbie here. And not all that sophisticated about investing. But I HAVE been through 87 2001 and 2009 and simply stopped looking at my portfolio.

I'm 66 and retired; have a pension and am taking spousal SS. DH is taking his own SS.

I am at a 42/58 portfolio right now, having pulled back from 60/40 in the years leading up to retirement. I'm on a glide path to go to 50/50 in the next 5 years ( until rmd and my SS). I'm hoping that this will make my seq of ret risk a little less risky and allow me some decent spending in the short term.

I guess we'll see how this works out!
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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by dknightd » Sun Aug 25, 2019 6:03 pm

Watty wrote:
Sun Aug 25, 2019 5:19 pm

It helps that we live in a medium to low cost of living area and have a pretty middle class lifestyle compared to some people here but with a paid off house once we both start Social Security that will be enough to pretty much pay our core retirement expenses for things like food, utilititles, Medicare supplements, and property taxes.
My problem is we live in a relatively low cost of living area. We'd like to move to a MCOL area. Where we have more friends and family. But It would cost about $200k more to buy a similar house there. $200k will buy many nice vacations, or an RV. We can probably afford either, but not both. For now we'll stay in our house, and see how things work out. I guess they call that being flexible ;)

Even with a paid off house, can you really live a "middle class lifestyle" on just SS? I think we'd survive on SS. But would have to give up some things we are used to, like cell phones and internet, and a car sitting in the driveway. And money for hobbies . . .

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by Sandtrap » Sun Aug 25, 2019 6:04 pm

EnjoyIt wrote:
Sun Aug 25, 2019 4:56 pm
@livesoft, 12+ years on bogleheads with 65,000+ posts has taught him that having more money will decrease the risk of running out of it. He is not wrong.

I think the next best way of combatting sequence of return risk is to decrease your fixed expenses as low as possible (no debt) so that when the big one comes, your human nature will have you cut back a little and you will turn out just fine.
+1
Great "common sense" approach!
When the road get's bumpy. . . . take your foot off the gas and slow down.
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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by dknightd » Sun Aug 25, 2019 6:12 pm

If you have more money than you are likely to need. Then SOR does not matter.
But not all people have that!

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by sharukh » Sun Aug 25, 2019 6:20 pm

Sandtrap wrote:
Sun Aug 25, 2019 5:24 pm
livesoft wrote:
Sun Aug 25, 2019 4:37 pm
. . . . . .
5. What works is having a big huge portfolio to start with. That is, don't retire as soon as your portfolio just ever so barely meets some pre-conceived idea of what will barely work if one does all kinds of planning. The most simple plan is to just have so much money that it doesn't matter.
+1
Always the "elephant in the room", rarely mentioned.

j
Exactly

EnjoyIt
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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by EnjoyIt » Sun Aug 25, 2019 6:34 pm

Sandtrap wrote:
Sun Aug 25, 2019 5:24 pm
livesoft wrote:
Sun Aug 25, 2019 4:37 pm
. . . . . .
5. What works is having a big huge portfolio to start with. That is, don't retire as soon as your portfolio just ever so barely meets some pre-conceived idea of what will barely work if one does all kinds of planning. The most simple plan is to just have so much money that it doesn't matter.
+1
Always the "elephant in the room", rarely mentioned.

j
We sort of talk about it in the guise of low withdrawal rates

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cognovimus
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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by cognovimus » Sun Aug 25, 2019 7:06 pm

Leif wrote:
Sun Aug 25, 2019 4:44 pm
Not specifically for SOR. However, I saved in a CD ladder that kicked in at retirement to carry me until 70. That allows me to wait for SS and RMD, and do some Roth conversions, without the need to touch the other parts of my portfolio. Those are all set to reinvest.
I'm interested in hearing more about this because we have CDs too. How many steps to age 70? Does each CD cover a year's (or 6M's expenses)? If so, what's reinvested? Or is this the "plan B," and you are actually withdrawing from other parts of the portfolio since the market is up and letting the CD reinvested without spending them down?

If you have a substantial amount in CDs, do you count that as part of your portfolio, as in Stocks/(Cash + Bond) or do you think in terms of Stock/Bonds + consider Cash separately. If the latter, what's your target AA for the non-Cash. Are you more investing more aggressively as a result?

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cognovimus
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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by cognovimus » Sun Aug 25, 2019 7:12 pm

dknightd wrote:
Sun Aug 25, 2019 6:12 pm
If you have more money than you are likely to need. Then SOR does not matter.
But not all people have that!
Right, I guess I consider this topic most relevant to those with substantial but not 100% risk-proof portfolios. However, even the very wealthy may care about the size of the pot they leave behind.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by MathIsMyWayr » Sun Aug 25, 2019 7:25 pm

livesoft wrote:
Sun Aug 25, 2019 4:37 pm
I am doing almost the opposite of what you listed.

1. No cash. Period.

2. Not spending conservatively unless you mean spending less than 4% and above of portfolio value.

3. Don't worry about flexibility nor inflation because inflation doesn't affect me as much as articles seem to suggest. I don't have to be flexible on spending as far as I can tell.

4. I love volatility, but I do realize that it probably costs me money. I just consider it as part of the fun of investing.


5. What works is having a big huge portfolio to start with. That is, don't retire as soon as your portfolio just ever so barely meets some pre-conceived idea of what will barely work if one does all kinds of planning. The most simple plan is to just have so much money that it doesn't matter.
1) No CD, I-bond?

5) Yes, a large portfolio to start with helps. A little useless math exercise: we want to find the maximum fixed inflation adjusted withdrawal in the case of market declining at a constant rate. Everything is in real dollars.
  • r: yearly market return
    n: number of years the portfolio lasts
    w: initial withdrawal rate (fixed real dollars)
    w<r * (1-r)^(n-1) / (1-(1-r)^n)
Example:
r=-5%, n=30, w=1.44%
r=-5%, n=25, w=2.02%
r=-7%, n=30, w=0.96%
r=-7%, n=25, w=1.47%

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by dknightd » Sun Aug 25, 2019 7:28 pm

EnjoyIt wrote:
Sun Aug 25, 2019 6:34 pm

We sort of talk about it in the guise of low withdrawal rates
One option is to have more than you likely ever spend.
That is just one option ;)

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by livesoft » Sun Aug 25, 2019 7:29 pm

MathIsMyWayr wrote:
Sun Aug 25, 2019 7:25 pm
1) No CD, I-bond?
We have no CDs, no savings account, no I-bonds.
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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by Soon2BXProgrammer » Sun Aug 25, 2019 7:29 pm

cognovimus wrote:
Sun Aug 25, 2019 4:13 pm
I've been reading about the "strategies" for managing/protecting against SOR Risk. Many of you know of Wade Pfau, who is listed as "Professor of Retirement Income." One of his articles is linked here: https://www.forbes.com/sites/wadepfau/2 ... fafa186fcf

Some of this is pretty common sense, but all the suggestions seem to have their drawbacks. I'm most interested in hearing from folks who retired in the 2005-2009 time frame, right in the middle of or before the Great Recession.

For example,

1. Maintain a cash buffer. How much cash, in terms of # of years expenses, considering a couple of additional years in which we'll want to minimize taxable income due to private (ACA) health insurance purchases. If it's normally 2-3 years and I add a couple of extra years for to cover the ACA years, that's a lot of cash sitting in 2% (if I'm lucky) accounts. So if I actually put 5 years of expenses in my bank accounts, what should the rest of my AA look like? Pfau also suggests a reverse mortgage and/or access to CVLI as an alternative to the cash drag of actual cash. Is anyone using that strategy?

2. Spend conservatively (especially if AA is aggressive). This "strategy" isn't all that helpful and may involve pain with no gain. Pfau concludes there is no safe withdrawal rate, particularly if spending is inflation-adjusted. It may also be difficult for new retirees who have the health to be more active, travel more, while they can.

3. Maintain spending flexibility. Be prepared to reduce spending after a portfolio decline and don't inflation adjust. To do this, you must have some "fluff" in the budget that you are willing to forgo if there is a market downturn. This may also render new retirees less able to engage in active (but sometimes expensive) lifestyles in their 60's. What % of your retirement budget could be trimmed if necessary to wait out a recession? Would this have a meaningful negative impact on your lifestyle for those X years?

4. Reduce volatility to reduce or eliminate SOQ risk. Here Pfau mentions how defined-benefit pensions help with this (but that's not really a tactic you can choose at the just-prior-to-retirement juncture), annuities (which seem very stingy in today's interest rate environment), and the "rising equity glide path" which his research shows helpful in a market downturn. Other studies show the inverse, and it probably depends on the specific conditions you personally encounter in those first few years of retirement. How have you reconciled your desire for optimal returns with the suggestion to reduce volatility? How is that reflected in your AA? Are you on a rising equity glide path or a declining equity glide path in retirement? Would your decision be different if you were retiring in 2020?

5. What else has worked for you? Looking for lived experience as well as stats.
Read:
https://www.kitces.com/blog/research-re ... ket-timer/
and its links to the original research done.
They work at the same institution (The American College) which Wade Pfau recently joined.

Almost everything that I've researched, there is no free lunch. it doesn't matter if you talk about a cash cushion or a yield shield, etc.

If the sequence of returns risk happens, it happens.

Everything I've seen basically shows, that pick your allocation, and stick with it. Treat the whole pot at one bucket of money, to really understand what your withdrawal rate is, and what your asset allocation is.

One note, yes 25x stocks/bonds and an extra 3x cash on the side will fair better than 25x stocks/bonds... but really you just have a more conservative 28x portfolio. so your withdrawal rate wouldn't be 4% it is 3.57%, which fairs a ton better with a bad sequence of returns. So there is no magic there.

There is also talk about using a bond tent and rising equity exposure:
https://www.kitces.com/blog/managing-po ... -red-zone/
https://www.kitces.com/blog/should-equi ... ly-better/
https://www.kitces.com/blog/acceleratin ... o-ballast/

I haven't seen good searched that say if you are 75/25 and already at your number, that it actually makes sense to increase bonds temporarily. that is just market timing... if you where working and you where trying to derisk your retirement date by having more bonds, then once you retire, the question is now what? It is to increase equities overtime, to deal with inflation over the long run.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by MathIsMyWayr » Sun Aug 25, 2019 7:36 pm

livesoft wrote:
Sun Aug 25, 2019 7:29 pm
MathIsMyWayr wrote:
Sun Aug 25, 2019 7:25 pm
1) No CD, I-bond?
We have no CDs, no savings account, no I-bonds.
I am also wondering whether I should purchase I-bonds as there are many fans on this forum. May you kindly share your thought on I-bonds?

No CDs, no savings accounts...I assume no MMs, either. Do they have a modern banking system in Texas?

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by dknightd » Sun Aug 25, 2019 7:38 pm

cognovimus wrote:
Sun Aug 25, 2019 7:12 pm
dknightd wrote:
Sun Aug 25, 2019 6:12 pm
If you have more money than you are likely to need. Then SOR does not matter.
But not all people have that!
Right, I guess I consider this topic most relevant to those with substantial but not 100% risk-proof portfolios. However, even the very wealthy may care about the size of the pot they leave behind.
You have to plan for what you want. I plan to leave nothing behind. I think I've taught my kids to take care of themselves. Likely there will be something left over for them.
I plan for a comfortable life. With perhaps some luxuries. Plan your life the way you see fit. I think I'm 95% confident I'll have want we want. I'm 99.999% we'll have enough to be comfortable.

Perhaps the first step is to decide how much you need to have food water and housing. Then add in other things you would really like to have. Then add in things you would like if you can afford them.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by Soon2BXProgrammer » Sun Aug 25, 2019 7:40 pm

MathIsMyWayr wrote:
Sun Aug 25, 2019 7:36 pm
livesoft wrote:
Sun Aug 25, 2019 7:29 pm
MathIsMyWayr wrote:
Sun Aug 25, 2019 7:25 pm
1) No CD, I-bond?
We have no CDs, no savings account, no I-bonds.
I am also wondering whether I should purchase I-bonds as there are many fans on this forum. May you kindly share your thought on I-bonds?

No CDs, no savings accounts...I assume no MMs, either. Do they have a modern banking system in Texas?
Currently, it looks like i-bonds are basically guaranteed to lose money on an after-tax basis. If I was worried about "unexpected" inflation, this might be a good deal, but I'm not.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by Dottie57 » Sun Aug 25, 2019 7:45 pm

dknightd wrote:
Sun Aug 25, 2019 6:03 pm
Watty wrote:
Sun Aug 25, 2019 5:19 pm

It helps that we live in a medium to low cost of living area and have a pretty middle class lifestyle compared to some people here but with a paid off house once we both start Social Security that will be enough to pretty much pay our core retirement expenses for things like food, utilititles, Medicare supplements, and property taxes.
My problem is we live in a relatively low cost of living area. We'd like to move to a MCOL area. Where we have more friends and family. But It would cost about $200k more to buy a similar house there. $200k will buy many nice vacations, or an RV. We can probably afford either, but not both. For now we'll stay in our house, and see how things work out. I guess they call that being flexible ;)

Even with a paid off house, can you really live a "middle class lifestyle" on just SS? I think we'd survive on SS. But would have to give up some things we are used to, like cell phones and internet, and a car sitting in the driveway. And money for hobbies . . .
It depends. I live in a condo complex with no amenities. I pay $374 a month for HOA fee. HOA fees takes care of outdoor maintenance, heat in winter, water, cable Tv, cable internet.my cell through cricket is $30 month. Since my place is small My electricity is on the smaller side. I could live fine on SS. My portfolio will give me more fun options.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by livesoft » Sun Aug 25, 2019 7:49 pm

MathIsMyWayr wrote:
Sun Aug 25, 2019 7:36 pm
I am also wondering whether I should purchase I-bonds as there are many fans on this forum. May you kindly share your thought on I-bonds?

No CDs, no savings accounts...I assume no MMs, either. Do they have a modern banking system in Texas?
I had a small amount in an I-bond bought at Treasury Direct just to see what the deal was with them and Treasury Direct. It was sold to pay some college expenses, but mostly to simplify our portfolio and reduce the number of stray accounts. Since I-bonds can only be purchased in limited amounts they are a distraction nowadays. That's what I think.

Our Vanguard MM funds are kept at $0.00 because we stay invested in our stock and bond funds. We have a checking account that is kept as low as possible by doing "just-in-time" bill paying.
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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by EnjoyIt » Sun Aug 25, 2019 8:51 pm

livesoft wrote:
Sun Aug 25, 2019 7:49 pm
MathIsMyWayr wrote:
Sun Aug 25, 2019 7:36 pm
I am also wondering whether I should purchase I-bonds as there are many fans on this forum. May you kindly share your thought on I-bonds?

No CDs, no savings accounts...I assume no MMs, either. Do they have a modern banking system in Texas?
I had a small amount in an I-bond bought at Treasury Direct just to see what the deal was with them and Treasury Direct. It was sold to pay some college expenses, but mostly to simplify our portfolio and reduce the number of stray accounts. Since I-bonds can only be purchased in limited amounts they are a distraction nowadays. That's what I think.

Our Vanguard MM funds are kept at $0.00 because we stay invested in our stock and bond funds. We have a checking account that is kept as low as possible by doing "just-in-time" bill paying.
Can you please elaborate on the “just in time bill paying.”
We keep about 1-2 months living expenses in our checking account. We spend money and when we drop below 1 month’s living expenses I transfer some cash from vanguard and get it back up to 2 months.

I have almost all our bills set to autopay and my fear is having an expense that has me overdraft. How do you avoid this?

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by HomerJ » Sun Aug 25, 2019 8:54 pm

livesoft wrote:
Sun Aug 25, 2019 4:37 pm
The most simple plan is to just have so much money that it doesn't matter.
We're all really impressed over here. Puff out your chest a little more...

Surely, you can offer better help than this.

(The correct answer to that is, of course, "Don't call me Shirley")
The J stands for Jay

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by Soon2BXProgrammer » Sun Aug 25, 2019 8:57 pm

HomerJ wrote:
Sun Aug 25, 2019 8:54 pm
livesoft wrote:
Sun Aug 25, 2019 4:37 pm
The most simple plan is to just have so much money that it doesn't matter.
We're all really impressed over here. Puff out your chest a little more...
SOR is more of an issue when you are trying to maximize your portfolio withdrawals early in your retirement. The point is if you saved more, or you plan to spend less, then you have more money then you need and portfolio survivability is less of an issue.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by we1 » Sun Aug 25, 2019 9:02 pm

livesoft wrote:
Sun Aug 25, 2019 7:49 pm
MathIsMyWayr wrote:
Sun Aug 25, 2019 7:36 pm
I am also wondering whether I should purchase I-bonds as there are many fans on this forum. May you kindly share your thought on I-bonds?

No CDs, no savings accounts...I assume no MMs, either. Do they have a modern banking system in Texas?
I had a small amount in an I-bond bought at Treasury Direct just to see what the deal was with them and Treasury Direct. It was sold to pay some college expenses, but mostly to simplify our portfolio and reduce the number of stray accounts. Since I-bonds can only be purchased in limited amounts they are a distraction nowadays. That's what I think.

Our Vanguard MM funds are kept at $0.00 because we stay invested in our stock and bond funds. We have a checking account that is kept as low as possible by doing "just-in-time" bill paying.
What is your Stock/Bond AA and do you use any tactical or strategic tilts? Agree big starting portfolio is best insurance.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by HomerJ » Sun Aug 25, 2019 9:03 pm

Soon2BXProgrammer wrote:
Sun Aug 25, 2019 8:57 pm
HomerJ wrote:
Sun Aug 25, 2019 8:54 pm
livesoft wrote:
Sun Aug 25, 2019 4:37 pm
The most simple plan is to just have so much money that it doesn't matter.
We're all really impressed over here. Puff out your chest a little more...
SOR is more of an issue when you are trying to maximize your portfolio withdrawals early in your retirement. The point is if you saved more, or you plan to spend less, then you have more money then you need and portfolio survivability is less of an issue.
Quantify it then.

What's the SWR where you have so much money you don't have to care about how your money is invested.

It can be 100% in stocks, 100% in bonds, or 100% in orange-juice futures... It just doesn't matter, because you are so rich.

What's the SWR where you don't have to care at all?
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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by dbr » Sun Aug 25, 2019 9:07 pm

HomerJ wrote:
Sun Aug 25, 2019 8:54 pm
livesoft wrote:
Sun Aug 25, 2019 4:37 pm
The most simple plan is to just have so much money that it doesn't matter.
We're all really impressed over here. Puff out your chest a little more...

Surely, you can offer better help than this.

(The correct answer to that is, of course, "Don't call me Shirley")
Well, a different way of taking that statement is to conclude that other than having "more money than you really need" there is no particularly effective plan for sequence of return risk. There may be more subtlety here than is first evident.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by Soon2BXProgrammer » Sun Aug 25, 2019 9:14 pm

HomerJ wrote:
Sun Aug 25, 2019 9:03 pm
Soon2BXProgrammer wrote:
Sun Aug 25, 2019 8:57 pm
HomerJ wrote:
Sun Aug 25, 2019 8:54 pm
livesoft wrote:
Sun Aug 25, 2019 4:37 pm
The most simple plan is to just have so much money that it doesn't matter.
We're all really impressed over here. Puff out your chest a little more...
SOR is more of an issue when you are trying to maximize your portfolio withdrawals early in your retirement. The point is if you saved more, or you plan to spend less, then you have more money then you need and portfolio survivability is less of an issue.
Quantify it then.

What's the SWR where you have so much money you don't have to care about how your money is invested.

It can be 100% in stocks, 100% in bonds, or 100% in orange-juice futures... It just doesn't matter, because you are so rich.

What's the SWR where you don't have to care at all?
50stocks (global cap-weighted allocation)/50bond (us intermediate-term treasuries) withdrawal at 3%

create some auto rebalance, and never look at it again.
----
The funny thing is this could support a much higher withdrawal.. in fact even if you start at 4%, if you don't experience a bad SOR, you will have way to much money.

So it is more making sure your ok with your 3ish % and start spending at 4%, and if bad returns come in the early years dial it back to 3. unfortunately, you don't know how long or if you actually needed to dial it back to 3, until way too late, because again you could either end up broke if you start spending more sooner, or end up being able to make camp fires with 100 dollar bills.

---
edit 2:
read:
https://www.kitces.com/blog/the-problem ... ing-rules/
Last edited by Soon2BXProgrammer on Sun Aug 25, 2019 9:24 pm, edited 2 times in total.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by Watty » Sun Aug 25, 2019 9:15 pm

dknightd wrote:
Sun Aug 25, 2019 6:03 pm
Watty wrote:
Sun Aug 25, 2019 5:19 pm

It helps that we live in a medium to low cost of living area and have a pretty middle class lifestyle compared to some people here but with a paid off house once we both start Social Security that will be enough to pretty much pay our core retirement expenses for things like food, utilititles, Medicare supplements, and property taxes.
My problem is we live in a relatively low cost of living area. We'd like to move to a MCOL area. Where we have more friends and family. But It would cost about $200k more to buy a similar house there. $200k will buy many nice vacations, or an RV. We can probably afford either, but not both. For now we'll stay in our house, and see how things work out. I guess they call that being flexible ;)

Even with a paid off house, can you really live a "middle class lifestyle" on just SS? I think we'd survive on SS. But would have to give up some things we are used to, like cell phones and internet, and a car sitting in the driveway. And money for hobbies . . .
My post said that SS could cover my core expenses, not so much my current "middle class" lifestyle.

If you dig deeper the question gets more complex and people often have different ideas of what a middle class lifestyle is and people often overestimate what a middle class income actually is, and that varies a lot by where you at.

The median household income in the US is only about $61K and people live on that while paying a for housing and raising kids. Middle class income is sometimes defined as being between about $40K and $120k which is a huge range.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by MathIsMyWayr » Sun Aug 25, 2019 9:15 pm

HomerJ wrote:
Sun Aug 25, 2019 9:03 pm
Quantify it then.

What's the SWR where you have so much money you don't have to care about how your money is invested.

It can be 100% in stocks, 100% in bonds, or 100% in orange-juice futures... It just doesn't matter, because you are so rich.

What's the SWR where you don't have to care at all?
Mathematically, there exists no such thing as SWR no matter what. As I showed earlier, if market declines 5% year after year without an end in sight, SWR is 2.02% and 1.44% to support 25, 30 years, respectively. With 7% decline, it is down to only 1.47% and 0.96%. 100x is not such an outrageous number!

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by EnjoyIt » Sun Aug 25, 2019 9:50 pm

MathIsMyWayr wrote:
Sun Aug 25, 2019 9:15 pm
HomerJ wrote:
Sun Aug 25, 2019 9:03 pm
Quantify it then.

What's the SWR where you have so much money you don't have to care about how your money is invested.

It can be 100% in stocks, 100% in bonds, or 100% in orange-juice futures... It just doesn't matter, because you are so rich.

What's the SWR where you don't have to care at all?
Mathematically, there exists no such thing as SWR no matter what. As I showed earlier, if market declines 5% year after year without an end in sight, SWR is 2.02% and 1.44% to support 25, 30 years, respectively. With 7% decline, it is down to only 1.47% and 0.96%. 100x is not such an outrageous number!
So that is what we should recommend to everyone? 100x?
But what if the markets plummets by 92% and never really recovers? Maybe we should consider 250x. How long do I need to work to get to 250x?

You are right. I can not argue with your logic. Anything can happen and nothing is 100% safe. But we can accept a small amount of risk and come up with something a little better than 100x or 250x. Which gets us back into a discussion of Safe Withdrawal Rates where no one can agree because everyone’s risk tolerance is different and everyone has a different level of fear of running out.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by Soon2BXProgrammer » Sun Aug 25, 2019 9:56 pm

EnjoyIt wrote:
Sun Aug 25, 2019 9:50 pm
MathIsMyWayr wrote:
Sun Aug 25, 2019 9:15 pm
HomerJ wrote:
Sun Aug 25, 2019 9:03 pm
Quantify it then.

What's the SWR where you have so much money you don't have to care about how your money is invested.

It can be 100% in stocks, 100% in bonds, or 100% in orange-juice futures... It just doesn't matter, because you are so rich.

What's the SWR where you don't have to care at all?
Mathematically, there exists no such thing as SWR no matter what. As I showed earlier, if market declines 5% year after year without an end in sight, SWR is 2.02% and 1.44% to support 25, 30 years, respectively. With 7% decline, it is down to only 1.47% and 0.96%. 100x is not such an outrageous number!
So that is what we should recommend to everyone? 100x?
But what if the markets plummets by 92% and never really recovers? Maybe we should consider 250x. How long do I need to work to get to 250x?

You are right. I can not argue with your logic. Anything can happen and nothing is 100% safe. But we can accept a small amount of risk and come up with something a little better than 100x or 250x. Which gets us back into a discussion of Safe Withdrawal Rates where no one can agree because everyone’s risk tolerance is different and everyone has a different level of fear of running out.
The question is can peoples withdrawals be flexible and it still considered a success? If so 25x is fine... If not... Then 30x or maybe even 33x

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by EnjoyIt » Sun Aug 25, 2019 10:01 pm

Soon2BXProgrammer wrote:
Sun Aug 25, 2019 9:56 pm
EnjoyIt wrote:
Sun Aug 25, 2019 9:50 pm
MathIsMyWayr wrote:
Sun Aug 25, 2019 9:15 pm
HomerJ wrote:
Sun Aug 25, 2019 9:03 pm
Quantify it then.

What's the SWR where you have so much money you don't have to care about how your money is invested.

It can be 100% in stocks, 100% in bonds, or 100% in orange-juice futures... It just doesn't matter, because you are so rich.

What's the SWR where you don't have to care at all?
Mathematically, there exists no such thing as SWR no matter what. As I showed earlier, if market declines 5% year after year without an end in sight, SWR is 2.02% and 1.44% to support 25, 30 years, respectively. With 7% decline, it is down to only 1.47% and 0.96%. 100x is not such an outrageous number!
So that is what we should recommend to everyone? 100x?
But what if the markets plummets by 92% and never really recovers? Maybe we should consider 250x. How long do I need to work to get to 250x?

You are right. I can not argue with your logic. Anything can happen and nothing is 100% safe. But we can accept a small amount of risk and come up with something a little better than 100x or 250x. Which gets us back into a discussion of Safe Withdrawal Rates where no one can agree because everyone’s risk tolerance is different and everyone has a different level of fear of running out.
The question is can peoples withdrawals be flexible and it still considered a success? If so 25x is fine... If not... Then 30x or maybe even 33x
And now we are right in the big controversy of what is a safe withdrawal rate which never gets us anywhere on this forum. Personally I am a big proponent of 25x with plenty of flexibility, but I can understand others being far more conservative. I have seen some sincerely talk about 50x. To each their own I guess.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by dbr » Sun Aug 25, 2019 10:13 pm

EnjoyIt wrote:
Sun Aug 25, 2019 10:01 pm


And now we are right in the big controversy of what is a safe withdrawal rate which never gets us anywhere on this forum. Personally I am a big proponent of 25x with plenty of flexibility, but I can understand others being far more conservative. I have seen some sincerely talk about 50x. To each their own I guess.
Perhaps so, but at least it locates SoR "risk" correctly in the context of safe withdrawal rather than as some unique off-chance disaster separate from all other considerations. This also helps to remove the concept that there is some specific action one takes to "manage" SoR "risk."

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by Leif » Sun Aug 25, 2019 11:27 pm

cognovimus wrote:
Sun Aug 25, 2019 7:06 pm
I'm interested in hearing more about this because we have CDs too. How many steps to age 70? Does each CD cover a year's (or 6M's expenses)? If so, what's reinvested? Or is this the "plan B," and you are actually withdrawing from other parts of the portfolio since the market is up and letting the CD reinvested without spending them down?

If you have a substantial amount in CDs, do you count that as part of your portfolio, as in Stocks/(Cash + Bond) or do you think in terms of Stock/Bonds + consider Cash separately. If the latter, what's your target AA for the non-Cash. Are you more investing more aggressively as a result?
As I was getting closer to my projected retirement I thought about reducing my equity allocation each year to reduce my risk (my glide slope). I took those funds and created a CD. Each year I would add a new 5 year CD. Before retirement I reached my desired equity allocation. As CDs came due I would take what I needed for the year and roll over the rest. Before retirement I didn't need the funds so I just rolled the CD and interest in a new CD. The downside to this it is not to tax friendly.

After retirement it turns out that my CDs were more than I needed. Instead of the footbridge that I needed to 70 I had built a 6 lane super highway. It was an overfunded Plan A. Now that I'm retired I take what I need for the year and with the remaining I "buy" my equities out of my tIRA accounts. I'm trying to reduce my equities in my tIRA with the hope that this reduces my RMDs when that time comes.

I count every investment, including money market funds, as part of my portfolio. But that does not include my house. The CDs are part of my fixed income and are simply labeled as CD's. I use to divide them up between short term and intermediate term, like my bond funds. But later I thought why do I need to do that? Just label them as "CDs". I no longer needed to move those entries around in the spreadsheet as remaining time is < 3 years and moved to short term.

Cash to me is cash. That include checking, savings, money markets. Anything that is liquid and does not change in principal value. So CDs and short term bond funds I do not consider cash. I know many others handle it differently on this site. This just make sense to me. My fixed income target (cash, CDs, ST and IT bonds) is at 50%.
Last edited by Leif on Sun Aug 25, 2019 11:48 pm, edited 3 times in total.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by MathIsMyWayr » Sun Aug 25, 2019 11:32 pm

dbr wrote:
Sun Aug 25, 2019 10:13 pm
EnjoyIt wrote:
Sun Aug 25, 2019 10:01 pm


And now we are right in the big controversy of what is a safe withdrawal rate which never gets us anywhere on this forum. Personally I am a big proponent of 25x with plenty of flexibility, but I can understand others being far more conservative. I have seen some sincerely talk about 50x. To each their own I guess.
Perhaps so, but at least it locates SoR "risk" correctly in the context of safe withdrawal rather than as some unique off-chance disaster separate from all other considerations. This also helps to remove the concept that there is some specific action one takes to "manage" SoR "risk."
As we hear all the time, hypothetical 4% survived the worst historical back testing. Some also argue that things are different from now on because of the historically low bond interest rates and we should lower the expectation. There are also others who claim that 4% is too conservative and we should spend more, "why deprive yourself and end up leaving a ton of money in the end?" I consider the "spend more" camp reckless and irresponsible. They have nothing to lose and will be heroes to those who adopted their brilliant idea successfully. I doubt whether they will practice what they preach to others. For myself, I will use 30x-33x. If I get to 50x without much hardship, so much better. I also choose a minimum of 10x in FI. What is important is not AA, but the size of FI to guard against SOR. If you have 20x in FI, the only thing you have to worry about is the sky falling.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by TierArtz » Mon Aug 26, 2019 1:41 am

1. Earned a military retirement
2. I down shifted from age minus 25 in bonds to 60/40
3. Got used to LBYM and invested 25% over the last 30ish years.
4. Above got me to over 50X annual expenses beyond pension; including 20 years fixed income.
5. Kicking savings rate to over 50% income in the home stretch.
6. Job that allows me to work as long as I want.
Last edited by TierArtz on Mon Aug 26, 2019 9:59 am, edited 1 time in total.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by Tdubs » Mon Aug 26, 2019 5:16 am

livesoft wrote:
Sun Aug 25, 2019 7:29 pm
MathIsMyWayr wrote:
Sun Aug 25, 2019 7:25 pm
1) No CD, I-bond?
We have no CDs, no savings account, no I-bonds.
But you have TIAA Traditional, right?

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by livesoft » Mon Aug 26, 2019 7:26 am

we1 wrote:
Sun Aug 25, 2019 9:02 pm
What is your Stock/Bond AA and do you use any tactical or strategic tilts? Agree big starting portfolio is best insurance.
My portfolio allocation is described in this thread with pictures: viewtopic.php?t=150267
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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by livesoft » Mon Aug 26, 2019 7:27 am

Tdubs wrote:
Mon Aug 26, 2019 5:16 am
But you have TIAA Traditional, right?
Yes. We have bonds including TIAA Traditional.
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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by livesoft » Mon Aug 26, 2019 7:34 am

EnjoyIt wrote:
Sun Aug 25, 2019 8:51 pm
Can you please elaborate on the “just in time bill paying.”
We keep about 1-2 months living expenses in our checking account. We spend money and when we drop below 1 month’s living expenses I transfer some cash from vanguard and get it back up to 2 months.

I have almost all our bills set to autopay and my fear is having an expense that has me overdraft. How do you avoid this?
What's to elaborate? It's like living paycheck-to-paycheck with very little buffer in the checking account. Credit cards are used for just about everything, too.

When we need money to pay upcoming bills and no dividends will arrive in time, then we sell some shares of an equity ETF out of taxable. The cash is in our checking account 2 business days later. We know what bils we are going to get and some of them are on autopay. It's not rocket surgery.
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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by flyingaway » Mon Aug 26, 2019 8:40 am

MathIsMyWayr wrote:
Sun Aug 25, 2019 11:32 pm
dbr wrote:
Sun Aug 25, 2019 10:13 pm
EnjoyIt wrote:
Sun Aug 25, 2019 10:01 pm


And now we are right in the big controversy of what is a safe withdrawal rate which never gets us anywhere on this forum. Personally I am a big proponent of 25x with plenty of flexibility, but I can understand others being far more conservative. I have seen some sincerely talk about 50x. To each their own I guess.
Perhaps so, but at least it locates SoR "risk" correctly in the context of safe withdrawal rather than as some unique off-chance disaster separate from all other considerations. This also helps to remove the concept that there is some specific action one takes to "manage" SoR "risk."
As we hear all the time, hypothetical 4% survived the worst historical back testing. Some also argue that things are different from now on because of the historically low bond interest rates and we should lower the expectation. There are also others who claim that 4% is too conservative and we should spend more, "why deprive yourself and end up leaving a ton of money in the end?" I consider the "spend more" camp reckless and irresponsible. They have nothing to lose and will be heroes to those who adopted their brilliant idea successfully. I doubt whether they will practice what they preach to others. For myself, I will use 30x-33x. If I get to 50x without much hardship, so much better. I also choose a minimum of 10x in FI. What is important is not AA, but the size of FI to guard against SOR. If you have 20x in FI, the only thing you have to worry about is the sky falling.
10x in FI? If 25 times of living expenses is viewed as FI, are you talking about 250 times of living expenses? If so, you really have nothing to worry about.

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Re: How Have You Planned for Sequence of Return Risk (SOR)?

Post by MathIsMyWayr » Mon Aug 26, 2019 9:25 am

flyingaway wrote:
Mon Aug 26, 2019 8:40 am
MathIsMyWayr wrote:
Sun Aug 25, 2019 11:32 pm
dbr wrote:
Sun Aug 25, 2019 10:13 pm
EnjoyIt wrote:
Sun Aug 25, 2019 10:01 pm


And now we are right in the big controversy of what is a safe withdrawal rate which never gets us anywhere on this forum. Personally I am a big proponent of 25x with plenty of flexibility, but I can understand others being far more conservative. I have seen some sincerely talk about 50x. To each their own I guess.
Perhaps so, but at least it locates SoR "risk" correctly in the context of safe withdrawal rather than as some unique off-chance disaster separate from all other considerations. This also helps to remove the concept that there is some specific action one takes to "manage" SoR "risk."
As we hear all the time, hypothetical 4% survived the worst historical back testing. Some also argue that things are different from now on because of the historically low bond interest rates and we should lower the expectation. There are also others who claim that 4% is too conservative and we should spend more, "why deprive yourself and end up leaving a ton of money in the end?" I consider the "spend more" camp reckless and irresponsible. They have nothing to lose and will be heroes to those who adopted their brilliant idea successfully. I doubt whether they will practice what they preach to others. For myself, I will use 30x-33x. If I get to 50x without much hardship, so much better. I also choose a minimum of 10x in FI. What is important is not AA, but the size of FI to guard against SOR. If you have 20x in FI, the only thing you have to worry about is the sky falling.
10x in FI? If 25 times of living expenses is viewed as FI, are you talking about 250 times of living expenses? If so, you really have nothing to worry about.
  • Min. total: 25x (10x in FI to guard against SOR, remainder: 15x)
    It happens to be an AA of 60:40.
    4% withdrawal rate
  • Desired total: 30x (12x in FI, remainder: 18x)
    3.3% withdrawal rate
  • Wild dream: 50x (20x in FI: remainder: 30x)
    2.0% withdrawal rate
If I get to over 50x, I will limit FI to no more than 15x. I might have a Madas touch.

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