How can I use the Rising Equity Glide Path?

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Darwin
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How can I use the Rising Equity Glide Path?

Post by Darwin » Sun Aug 12, 2018 8:15 pm

I've been looking into the Rising Equity Glide Path concept, and I'm intrigued. However, I haven't been able to find an applicable model that suggests anything more than the one (simple) Kitces graph.
Do any of you have access to a PRACTICAL model of how this can be applied to a portfolio?

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willthrill81
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Re: How can I use the Rising Equity Glide Path?

Post by willthrill81 » Sun Aug 12, 2018 8:32 pm

Darwin wrote:
Sun Aug 12, 2018 8:15 pm
I've been looking into the Rising Equity Glide Path concept, and I'm intrigued. However, I haven't been able to find an applicable model that suggests anything more than the one (simple) Kitces graph.
Do any of you have access to a PRACTICAL model of how this can be applied to a portfolio?
What are you specifically looking for? You can just start raising your equity percentage until you get it as high as you want/need.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Taylor Larimore
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Re: How can I use the Rising Equity Glide Path?

Post by Taylor Larimore » Sun Aug 12, 2018 8:36 pm

Darwin wrote:
Sun Aug 12, 2018 8:15 pm
I've been looking into the Rising Equity Glide Path concept, and I'm intrigued. However, I haven't been able to find an applicable model that suggests anything more than the one (simple) Kitces graph.
Do any of you have access to a PRACTICAL model of how this can be applied to a portfolio?
Darwin:

Be careful what you ask for. The retirement experts in every fund company target fund use a lower equity glide path.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: How can I use the Rising Equity Glide Path?

Post by Darwin » Sun Aug 12, 2018 9:01 pm

willthrill81 wrote:
Sun Aug 12, 2018 8:32 pm
Darwin wrote:
Sun Aug 12, 2018 8:15 pm
I've been looking into the Rising Equity Glide Path concept, and I'm intrigued. However, I haven't been able to find an applicable model that suggests anything more than the one (simple) Kitces graph.
Do any of you have access to a PRACTICAL model of how this can be applied to a portfolio?
What are you specifically looking for? You can just start raising your equity percentage until you get it as high as you want/need.
From what I've read on the topic, the idea is to DECREASE equities a few years before retirement (my potential situation), to then increase again a few years after I retire. This method seems to protect somewhat in worst-scenario retirement failures (2008 for instance). I've tended to lean heavy (70/30 +) toward equities, but I'm considering this model as a 6-10 year "dip" in equities to increase the chances of portfolio survival over the long term.
What I've been looking for is an example/template of how one might adjust the percentages through the years, and/or what the results would have been if applied retroactively.

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Re: How can I use the Rising Equity Glide Path?

Post by arcticpineapplecorp. » Sun Aug 12, 2018 9:14 pm

a 50/50 portfolio had a 95% chance of survival over 30 years at a 4% withdrawal (100% at 3% withdrawal):
a 75/25 portfolio had a 98% chance of survival over 30 years at a 4% withdrawal (100% at 3 % withdrawal):

withdrawals are adjusted for inflation.
this was true for all 30 year periods between 1926-1995 (that includes the Great Depression and the 73-74 brutal bear market). What more do you need than that?

https://www.bogleheads.org/wiki/File:TrinityTable3.jpg
https://www.bogleheads.org/wiki/Safe_withdrawal_rates
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Darwin
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Re: How can I use the Rising Equity Glide Path?

Post by Darwin » Sun Aug 12, 2018 9:25 pm

Taylor Larimore wrote:
Sun Aug 12, 2018 8:36 pm
Darwin wrote:
Sun Aug 12, 2018 8:15 pm
I've been looking into the Rising Equity Glide Path concept, and I'm intrigued. However, I haven't been able to find an applicable model that suggests anything more than the one (simple) Kitces graph.
Do any of you have access to a PRACTICAL model of how this can be applied to a portfolio?
Darwin:

Be careful what you ask for. The retirement experts in every fund company target fund use a lower equity glide path.

Best wishes.
Taylor
I totally get that. But with new tools (like the Monte Carlo simulation) some people are tinkering around with different scenarios... I'm just curious whether different modeling might bring new insights regarding stability. Up until recently, we were forced to accept the views of our financial advisors, may of whom were double-dealing. These days, we have to be experts in both our primary field and (also) financial experts in our own right.

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Re: How can I use the Rising Equity Glide Path?

Post by tibbitts » Sun Aug 12, 2018 9:35 pm

arcticpineapplecorp. wrote:
Sun Aug 12, 2018 9:14 pm
a 50/50 portfolio had a 95% chance of survival over 30 years at a 4% withdrawal (100% at 3% withdrawal):
a 75/25 portfolio had a 98% chance of survival over 30 years at a 4% withdrawal (100% at 3 % withdrawal):

withdrawals are adjusted for inflation.
this was true for all 30 year periods between 1926-1995 (that includes the Great Depression and the 73-74 brutal bear market). What more do you need than that?

https://www.bogleheads.org/wiki/File:TrinityTable3.jpg
https://www.bogleheads.org/wiki/Safe_withdrawal_rates
But I believe that was for a domestic-only portfolio, which very few Bogleheads would advocate today.

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Re: How can I use the Rising Equity Glide Path?

Post by jainn » Sun Aug 12, 2018 9:57 pm

tibbitts wrote:
Sun Aug 12, 2018 9:35 pm
arcticpineapplecorp. wrote:
Sun Aug 12, 2018 9:14 pm
a 50/50 portfolio had a 95% chance of survival over 30 years at a 4% withdrawal (100% at 3% withdrawal):
a 75/25 portfolio had a 98% chance of survival over 30 years at a 4% withdrawal (100% at 3 % withdrawal):

withdrawals are adjusted for inflation.
this was true for all 30 year periods between 1926-1995 (that includes the Great Depression and the 73-74 brutal bear market). What more do you need than that?

https://www.bogleheads.org/wiki/File:TrinityTable3.jpg
https://www.bogleheads.org/wiki/Safe_withdrawal_rates
But I believe that was for a domestic-only portfolio, which very few Bogleheads would advocate today.
Historic Global portfolio withdrawal rates.

https://finpage.blog/2017/03/25/investi ... ld-part-3/

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Svensk Anga
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Re: How can I use the Rising Equity Glide Path?

Post by Svensk Anga » Sun Aug 12, 2018 10:02 pm

The strategy outlined in this post from the Oblivious Investor Blog might give you a good starting point. https://obliviousinvestor.com/an-ideal- ... -strategy/

It is not explicitly rising equity but it should work out that way. One segments the portfolio into two pieces: one to substitute for foregone SS benefits from the retirement date to SS claiming (ideally at age 70) and another to cover remaining spending in excess of SS benefits. The first portfolio should be entirely safe fixed income. The second can be as high an equity fraction as the investor can tolerate. As the first portfolio is spent down over the early retirement years, it becomes relatively smaller, and the blend of the two will have a rising equity path if the second portfolio is rebalanced to constant % equity.

When SS with full delayed retirement credits kicks in, it should constitute a substantial fraction of most retirees' non-discretionary spending. That should make it more comfortable to hold a high equity portfolio than with a smaller portion of assured income.

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Re: How can I use the Rising Equity Glide Path?

Post by willthrill81 » Sun Aug 12, 2018 10:21 pm

Darwin wrote:
Sun Aug 12, 2018 9:01 pm
willthrill81 wrote:
Sun Aug 12, 2018 8:32 pm
Darwin wrote:
Sun Aug 12, 2018 8:15 pm
I've been looking into the Rising Equity Glide Path concept, and I'm intrigued. However, I haven't been able to find an applicable model that suggests anything more than the one (simple) Kitces graph.
Do any of you have access to a PRACTICAL model of how this can be applied to a portfolio?
What are you specifically looking for? You can just start raising your equity percentage until you get it as high as you want/need.
From what I've read on the topic, the idea is to DECREASE equities a few years before retirement (my potential situation), to then increase again a few years after I retire. This method seems to protect somewhat in worst-scenario retirement failures (2008 for instance). I've tended to lean heavy (70/30 +) toward equities, but I'm considering this model as a 6-10 year "dip" in equities to increase the chances of portfolio survival over the long term.
What I've been looking for is an example/template of how one might adjust the percentages through the years, and/or what the results would have been if applied retroactively.
Well you know that Kitces and Pfau used something like a 30/70 AA at the point of retirement and then let the equity portion slowly go upwards to something like 70/30 after a period of time; I can't recall how long. I think that this makes perfect sense, and the empirical data support it as well, though the marginal improvement over a fixed AA like 50/50 doesn't seem to be substantial. It may make you sleep better at night right after you retire though, knowing that most of your portfolio is at least temporarily in comparatively 'safe' bonds.

Regarding Taylor's comment, a rising equity glidepath actually makes perfect sense in the light of sequence of returns risk, which is greatest at the point of retirement, not far into retirement. The idea that an 80 year old needs 80% bonds is old-fashioned indeed, for instance. It might work fine, but few would call it mathematically optimal. But it's called personal finance for a reason.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: How can I use the Rising Equity Glide Path?

Post by hesson11 » Sun Aug 12, 2018 10:25 pm

Darwin, you seem to be hitting some headwinds here! I, too, find this idea intriguing, though I don't know whether I'd have the guts to carry it out. If you haven't seen the article below, perhaps it will be of help:

http://www.aaii.com/journal/article/red ... ncrease-it

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Re: How can I use the Rising Equity Glide Path?

Post by Hyperborea » Sun Aug 12, 2018 10:35 pm

Early Retirement Now has done a few interesting postings on a rising equity glide path as part of his long running withdrawal series.

Kitces has also done glide path studies but using Monte Carlo data. Those studies have some contrary results to the historical data studies - possibly because Kitces' Monte Carlo simulations don't include a number of factors of the real markets such as reversion to the mean. That's not a particular failing of Kitces but of pretty much all Monte Carlo simulations.

The rising glide path makes a lot more sense for longer retirements. You may have a 40, 50, or even 60 year horizon and for those longer retirements a higher equity allocation has a much higher success rate. The glide path is to reduce the impact of an initial bad sequence of returns on those higher equity allocations. The effect isn't huge since you are trying to reduce the small number of failures to an even smaller number and/or to make the failures that do occur less severe. You pay for this reduction in failures by giving up some top end returns.

I'm on a glide path myself going from a current 10 years or so of fixed income (bonds, CDs, and cash) down to about 2 years or so. I have left the equity portion of my portfolio alone other than rebalancing over the first 2 years of early retirement and have about another 8 to go until I stop the spend down.
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Re: How can I use the Rising Equity Glide Path?

Post by aristotelian » Sun Aug 12, 2018 10:47 pm

A simple approach would be to use years expenses instead of % stocks/bonds. Instead of "60/40", start your retirement with 15 years stocks/10 years bonds. If the market goes up, keep 10 years expenses in bonds but keep adding any surplus to stock. As long as you have 10 years expenses in bonds, you have the same downside risk as you did when you were 60/40, although your allocation may have increased to 70/30 with the growth in stocks.

The only issue, of course, is what to do if the market drops.

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Re: How can I use the Rising Equity Glide Path?

Post by GuyInFL » Sun Aug 12, 2018 10:50 pm

Darwin asks...
Do any of you have access to a PRACTICAL model of how this can be applied to a portfolio?
Take a look at www.cfiresim.com . It supports multiple funding streams and you can use that to model a rising glide path.
I've got a military pension that provides a nice base income. That plus SS @ 70 will cover my retirement expenses pretty well but I don't want to put too much of my nest egg into fixed investments to cover the gap between retirement and 70. I've been looking at funding a portion of the gap with fixed investments which will certainly cover my minimum retirement expenses and then withdrawing somewhere around 3.5%-4% of my remaining nest egg to cover the rest of the gap. That in effect, generates a rising glide path discussed above and elsewhere.
This can be modeled in cfiresim using multiple funding streams of various durations.

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Re: How can I use the Rising Equity Glide Path?

Post by Darwin » Sun Aug 12, 2018 11:01 pm

Hyperborea wrote:
Sun Aug 12, 2018 10:35 pm
Early Retirement Now has done a few interesting postings on a rising equity glide path as part of his long running withdrawal series.

Kitces has also done glide path studies but using Monte Carlo data. Those studies have some contrary results to the historical data studies - possibly because Kitces' Monte Carlo simulations don't include a number of factors of the real markets such as reversion to the mean. That's not a particular failing of Kitces but of pretty much all Monte Carlo simulations.

The rising glide path makes a lot more sense for longer retirements. You may have a 40, 50, or even 60 year horizon and for those longer retirements a higher equity allocation has a much higher success rate. The glide path is to reduce the impact of an initial bad sequence of returns on those higher equity allocations. The effect isn't huge since you are trying to reduce the small number of failures to an even smaller number and/or to make the failures that do occur less severe. You pay for this reduction in failures by giving up some top end returns.

I'm on a glide path myself going from a current 10 years or so of fixed income (bonds, CDs, and cash) down to about 2 years or so. I have left the equity portion of my portfolio alone other than rebalancing over the first 2 years of early retirement and have about another 8 to go until I stop the spend down.
Thanks for the reply! The Kitces link you provided is the one that got me interested in the concept (from another bogleheads thread). I'm looking at a 40-year horizon. And while I'm perfectly comfortable with a 70/30 AA over the long run, I'm not above second-guessing my assumptions. So when I read their analysis suggesting that a several-year dip in equities actually decreases the chance of moderate-wealth retirement failures , I couldn't see a down-side risk-wise... Except for the fact that what I was reading was vague on details. For instance, how would a 30/40/50 year horizon change the glide path (ie, the "dip").
Maybe this hasn't been looked into yet. I'm just curious if anyone knows of some more varied comparisons, suggesting different lengths of "dip" for early retirement.

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Re: How can I use the Rising Equity Glide Path?

Post by Sandi_k » Mon Aug 13, 2018 12:45 am

There are two articles that have influenced my thinking:

https://www.onefpa.org/journal/Pages/Re ... 0Path.aspx

https://earlyretirementnow.com/2017/09/ ... lidepaths/

My Takeaway: start at 30% equities, move to 70% in 2.5% annual increments; this will mean I'm at ~ 70/30 in Year 16.

I'm thinking of backing it up with a bucket strategy - taking $50k per year in years 1-5 in fixed income/CDs to avoid possible sale requirements in a recession; then DH's SocSec kicks in and the mortgage is paid off. In Years 6-10 I'd use another $25k in fixed income from our portfolio to bridge, until Year 10, when I'm 70, and file for SocSec.

So far, so good. I feel like we have an actionable plan, and a portfolio that is currently 60/40, if I include the fixed income portion. I have 7 years til retirement, so I have time to hone the execution.

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Re: How can I use the Rising Equity Glide Path?

Post by jebmke » Mon Aug 13, 2018 12:52 am

Sandi_k wrote:
Mon Aug 13, 2018 12:45 am
I'm thinking of backing it up with a bucket strategy - taking $50k per year in years 1-5 in fixed income/CDs to avoid possible sale requirements in a recession;
If you are starting with a relatively conservative allocation, you wouldn't need to be selling equity in a down turn. You'd be buying equity to get back to your allocation (and/or selling bonds to eat). This is the exact scenario I had when I retired in December 2007. We had set our allocation at 40/60 to stabilize the early years. 2008-09 hit so we were selling bonds and buying equity the first years.

Now that my pension has started, I am going to just let equity glide up naturally. No more re-balancing on the upside.
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Re: How can I use the Rising Equity Glide Path?

Post by nisiprius » Mon Aug 13, 2018 5:03 am

"Rising equity glide path" is probably a misnomer, and Kitces has stopped calling it that. Recently he has been calling it a a bond tent.

The point is not so much to increase your equity allocation during retirement. The point is to go to a higher bond allocation (and thus a lower equity allocation) than traditional glide paths during the years around the start of retirement. In the original paper, the authors note that
in many scenarios, the optimal rising equity glide paths still finish with little more in equities than the 60/40 portfolios that are commonly used by many planners anyway; thus, the approach actually results in less average equity exposure throughout retirement, less portfolio volatility along the way, and a portfolio that finishes with no more equity exposure than a static approach would have implied.
I notice, too, both the original paper and Kitces' 2016 article linked above frame this in the context of "worth additional research," not "this is a recommendation." The article says "Notably, there’s still far more research to be done to optimize the exact shape and the slope of the V-shaped equity glidepath and the bond tent."

You're pretty much going to have to do it yourself, as a bond tent hasn't been incorporated into any target date funds as far as I know. And in the original paper the authors say something very important which should not be overlooked:
The clear caveat of this approach is that it may create concerns for seniors in their later years. Seniors may not be comfortable, from a risk tolerance perspective, handling the greater equity exposures implied by this approach.
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Re: How can I use the Rising Equity Glide Path?

Post by dh » Mon Aug 13, 2018 6:43 am

Darwin wrote:
Sun Aug 12, 2018 9:01 pm

From what I've read on the topic, the idea is to DECREASE equities a few years before retirement (my potential situation), to then increase again a few years after I retire.
That is my understanding as well. However, I am uncertain about increasing equities after retirement. Does increasing the percentages of equities post retirement simply the result of a "bucket-like" strategy where the person is using money from fixed income (thus obviously increasing equity percentages). Or are the authors of the study truly talking about starting to increase the percentage of equities (through shifting bonds to stocks) in retirement. I assume it is the former.

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Re: How can I use the Rising Equity Glide Path?

Post by vineviz » Mon Aug 13, 2018 6:47 am

dh wrote:
Mon Aug 13, 2018 6:43 am
Darwin wrote:
Sun Aug 12, 2018 9:01 pm

From what I've read on the topic, the idea is to DECREASE equities a few years before retirement (my potential situation), to then increase again a few years after I retire.
That is my understanding as well. However, I am uncertain about increasing equities after retirement. Does increasing the percentages of equities post retirement simply the result of a "bucket-like" strategy where the person is using money from fixed income (thus obviously increasing equity percentages). Or are the authors of the study truly talking about starting to increase the percentage of equities (through shifting bonds to stocks) in retirement. I assume it is the former.
I’m pretty sure those are just two different ways of describing the same process.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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Re: How can I use the Rising Equity Glide Path?

Post by indexonlyplease » Mon Aug 13, 2018 6:50 am

Darwin wrote:
Sun Aug 12, 2018 9:25 pm
Taylor Larimore wrote:
Sun Aug 12, 2018 8:36 pm
Darwin wrote:
Sun Aug 12, 2018 8:15 pm
I've been looking into the Rising Equity Glide Path concept, and I'm intrigued. However, I haven't been able to find an applicable model that suggests anything more than the one (simple) Kitces graph.
Do any of you have access to a PRACTICAL model of how this can be applied to a portfolio?
Darwin:

Be careful what you ask for. The retirement experts in every fund company target fund use a lower equity glide path.

Best wishes.
Taylor
I totally get that. But with new tools (like the Monte Carlo simulation) some people are tinkering around with different scenarios... I'm just curious whether different modeling might bring new insights regarding stability. Up until recently, we were forced to accept the views of our financial advisors, may of whom were double-dealing. These days, we have to be experts in both our primary field and (also) financial experts in our own right.
I would pick a AA that you will be comfortable in retirement and have the correct amount of fixed income. I like the idea many have posted here that they built up their fixed income in saving (cd ect) for a few years incase of a market correction. Then you can pull income from the savings and leave the investments alone.

My thinking is why use a stategy that could just result in a possible mistake. If anything I would follow the income target fund at Vanguard to reduce risk.

I went from 100% stock funds to a 50/50 in retirement. Mainly because I had enough and wanted to reduce risk.

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Re: How can I use the Rising Equity Glide Path?

Post by rkhusky » Mon Aug 13, 2018 6:57 am

willthrill81 wrote:
Sun Aug 12, 2018 10:21 pm
Regarding Taylor's comment, a rising equity glidepath actually makes perfect sense in the light of sequence of returns risk, which is greatest at the point of retirement, not far into retirement. The idea that an 80 year old needs 80% bonds is old-fashioned indeed, for instance. It might work fine, but few would call it mathematically optimal. But it's called personal finance for a reason.
What was optimal in the past may not be optimal for the future.

The correct answer probably depends on your situation. If your portfolio is large enough, then you can afford to take the extra risk that an equity-heavy portfolio brings. If your portfolio is too small, then perhaps you need to take the risk in order to have a decent shot at a comfortable retirement. But if you are near the edge of having enough for a comfortable retirement, do you want to take the risk of not having enough, in order to obtain more than you need? There are no guarantees in investing. Just because something hasn't happened in the past does not mean that it won't happen in the future.

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Re: How can I use the Rising Equity Glide Path?

Post by indexonlyplease » Mon Aug 13, 2018 6:57 am

jebmke wrote:
Mon Aug 13, 2018 12:52 am
Sandi_k wrote:
Mon Aug 13, 2018 12:45 am
I'm thinking of backing it up with a bucket strategy - taking $50k per year in years 1-5 in fixed income/CDs to avoid possible sale requirements in a recession;
If you are starting with a relatively conservative allocation, you wouldn't need to be selling equity in a down turn. You'd be buying equity to get back to your allocation (and/or selling bonds to eat). This is the exact scenario I had when I retired in December 2007. We had set our allocation at 40/60 to stabilize the early years. 2008-09 hit so we were selling bonds and buying equity the first years.

Now that my pension has started, I am going to just let equity glide up naturally. No more re-balancing on the upside.
This sounds like the correct stategy to use. I almost did the same thing (retired 2 yrs ago) dropped to a 50/50 AA but my pension kicked in at retirement so I am just lettting the investments ride. Not sure I will even reballance in January.

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Re: How can I use the Rising Equity Glide Path?

Post by AlohaJoe » Mon Aug 13, 2018 7:12 am

vineviz wrote:
Mon Aug 13, 2018 6:47 am
dh wrote:
Mon Aug 13, 2018 6:43 am
Darwin wrote:
Sun Aug 12, 2018 9:01 pm

From what I've read on the topic, the idea is to DECREASE equities a few years before retirement (my potential situation), to then increase again a few years after I retire.
That is my understanding as well. However, I am uncertain about increasing equities after retirement. Does increasing the percentages of equities post retirement simply the result of a "bucket-like" strategy where the person is using money from fixed income (thus obviously increasing equity percentages). Or are the authors of the study truly talking about starting to increase the percentage of equities (through shifting bonds to stocks) in retirement. I assume it is the former.
I’m pretty sure those are just two different ways of describing the same process.
They are different things. A rising equity glide path will -- for every year -- have a fixed asset allocation that you have to rebalance back to regardless of what the market may or may not be doing. Bucket strategies don't; their whole raison d'etre is to be able to ignore the market and not rebalance back (at least during times of market stress).

Here's an example of how the two can differ dramatically.

Retiree A: Say you are 70 years old and your rising equity glidepath says you should have 42% stocks this year and 44% stocks next year.
Retiree B: Say you're doing buckets and you've got 15 years expenses in bonds and the rest in stocks. Let's say this works out to 58/42, so you've actually got the same starting asset allocation in both scenarios.

Scenario 1: Stocks drop 30%. Both retirees are now at 33/66. Retiree A goes "well my rising equity glidepath says I need to rebalance back to 44/56. So I need to sell almost 20% of my bonds. Retiree B goes "well, I just spend from my bond bucket when things are down and don't rebalance". So Retiree A will have an asset allocation of 44/56 and Retiree B will have an asset allocation of 33/66.

Scenario 2: Stocks go up 30%. Both retirees are now at 49/51. Retiree A goes "I overshot my rising equity glidepath, so I need to sell stocks to get back to 44/56". Retiree B....it depends on exactly what their bucket strategy says. A lot of bucket strategies would go "hey, as long as you've got N years in bonds, we don't care what your stocks are doing". So Retiree A is at 44/56 and Retiree B is at 49/51.

In short: bucket strategies don't care (much) about a fixed asset allocation whereas rising equity glidepaths care a lot about a fixed asset allocation. The outcomes are different enough that I don't think it is accurate to describe rising equity as "bucket-like".

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Re: How can I use the Rising Equity Glide Path?

Post by The Wizard » Mon Aug 13, 2018 7:24 am

Darwin wrote:
Sun Aug 12, 2018 11:01 pm
... I'm just curious if anyone knows of some more varied comparisons, suggesting different lengths of "dip" for early retirement.
I'll give you my personal experience.
I retired at 63 in 2013 and kept my AA at 50% stocks for the first few years to guard against Sequence of Return risk, meaning a nasty stock market crash in first few retirement years while I was bridging the gap to SS.

But now, with 18 months to go until starting SS at age 70 ($3500/month!), I feel I've pretty much survived my SoR period and have let my AA drift up to 60% stocks, where I plan to leave it indefinitely.

This action is for two reasons:
1) at age 70, my income from immediate annuities + SS should be more than enough to cover my needs without regular portfolio withdrawals,

2) my Ability and Willingness to increase the risk level of my portfolio a bit are both good...
Attempted new signature...

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Re: How can I use the Rising Equity Glide Path?

Post by dknightd » Mon Aug 13, 2018 8:26 am

The "problem" with all analysis is it based on either historical data, or future projections. Neither of which might be what we will see going forward. And sometimes the analysis is based on maximizing lifetime spending, or some other parameter I might not care about.

I like the U, or V, shaped concept of reducing exposure to "market" returns when approaching retirement, then increasing it later on.

I have what I consider a more or less organic approach. I've been slowly reducing my stock holdings over the last couple of years. Basically if the S&P500 went more than 1% above the previous time I sold, I sell a little more. I've actually had to sell a little more than I hoped, but, that is only because the market went up more the I anticipated. Which is a good thing, maybe ;) I plan to use those safer funds to carry me through til 70 (when I plan to take SS) and to buy some SPIA, so that when I'm 70 I have enough more or less guaranteed income to cover our "comfortable enough" income needs. By the time that is done, I'll probably end up with a roughly 60/40 split which I can use for discretionary spending (or other things).

I'm moderately conservative. I want my expenses covered so I can not worry about it and sleep at night. I'm not chasing money, but if it falls in my lap I'll take it, or pass it on.

There is no one right answer for everybody. As somebody said it is called "personal finance" for a reason. You have to figure out what is right for you, and be willing and able to change plans as things go forward. :beer

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Re: How can I use the Rising Equity Glide Path?

Post by Hyperborea » Mon Aug 13, 2018 9:28 am

nisiprius wrote:
Mon Aug 13, 2018 5:03 am
"Rising equity glide path" is probably a misnomer, and Kitces has stopped calling it that. Recently he has been calling it a a bond tent.
The pre-retirement side of a tent is to reduce the retirement date risk of not being able to retire when you want to. If you are willing to be flexible with the date then front side is not needed. The post-retirement side is to reduce the risks of retirement failure. I guess if we are going to rename things, then I am using a bond lean-to since I've only got the post-retirement side.
nisiprius wrote:
Mon Aug 13, 2018 5:03 am
The point is not so much to increase your equity allocation during retirement. The point is to go to a higher bond allocation (and thus a lower equity allocation) than traditional glide paths during the years around the start of retirement.
In Kitces' work he uses a Monte Carlo simulation to test his glides/tents and those results are not the same as those using real world data. That's likely due to the limited modelling power those simulations have. Have a look at the Early Retirement Now work on glide paths.

https://earlyretirementnow.com/2017/09/ ... lidepaths/
https://earlyretirementnow.com/2017/09/ ... lidepaths/
Why are my results so different from the Michael Kitces and Wade Pfau research? Hint: Historical Simulations vs. Monte Carlo Simulations.
Quite amazingly, the glidepath recommended by the Kitces and Pfau study (30 to 70%) is consistently one of the worst. It not only underperforms pretty much all of the other ERN-designed glidepaths. It’s actually so bad that it even underperforms most of the static asset allocation paths in the historical simulations! At first, I thought this is because of my 60-year horizon, but as we will see in just a minute, the Kitces and Pfau glidepath is pretty universally inferior, even over a 30-year horizon!
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Re: How can I use the Rising Equity Glide Path?

Post by heyyou » Mon Aug 13, 2018 10:37 am

Almost on topic:
McClung suggests starting with very near 50% in bond funds, then spending from only those bond funds, rebalancing when the equities have grown to 120% real (inflation adjusted) from retirement day, while 110% or 100% are only slightly less optimal rebalancing points. It is bond depletion with the same timing and effect as the rising equity method.

He is also withdrawing a calculated percentage of each recent annual portfolio value which would reduce the WD amount during periods of low market values. That too helps portfolio longevity. Using multiple small modifications seems like a good buffer for sequence risk. That risk is obvious when it occurs, for those who are paying attention, but that excludes the SWR retirees.

David Zolt calculated which inflation boosts to skip by those SWR retirement spenders as another method to avoid the damage from sequence risk.

Every one of those solutions involves spending slightly less, early in retirement if real returns are initially poor. Thus, it would be wise to have your necessary expenses be smaller than your expected retirement income. The big picture is living within your means still matters, however you choose to do that during the essential first decade of retirement spending.

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Re: How can I use the Rising Equity Glide Path?

Post by dknightd » Mon Aug 13, 2018 11:06 am

FWIW if S&P500 goes 1% above its previous record I will sell more. Even if it seems silly, I have a plan and I'm sticking to it. Sell high - hope it is enough - buy back in as needed. I think I have enough if my investments can keep up with inflation. YMMV

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Re: How can I use the Rising Equity Glide Path?

Post by 2015 » Mon Aug 13, 2018 11:24 am

Taylor Larimore wrote:
Sun Aug 12, 2018 8:36 pm
Darwin wrote:
Sun Aug 12, 2018 8:15 pm
I've been looking into the Rising Equity Glide Path concept, and I'm intrigued. However, I haven't been able to find an applicable model that suggests anything more than the one (simple) Kitces graph.
Do any of you have access to a PRACTICAL model of how this can be applied to a portfolio?
Darwin:

Be careful what you ask for. The retirement experts in every fund company target fund use a lower equity glide path.

Best wishes.
Taylor
I agree with this, but I do have my own reasons.

A study of history shows what "students of investing" repeatedly get wrong (with almost absolute certainty) isn't that they haven't tried 1001 ways to build the most clever portfolio on the block. It's that they haven't taken the time to thoroughly sort through their obsession with building spurious investing narratives, with creating certainty (especially since there is none), and with their own deleterious blind spots in investment decision-making.

I agree with Buffet that one really only has to get very few things right in life to be successful. Endlessly tinkering with the most tricked out portfolio is not one of them.

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Re: How can I use the Rising Equity Glide Path?

Post by Johnnie » Mon Aug 13, 2018 11:48 am

Darwin wrote:
Sun Aug 12, 2018 8:15 pm
I've been looking into the Rising Equity Glide Path concept, and I'm intrigued...

I'm doing a not-very-radical version of this, with an eye toward mitigating sequence of returns risk.

With just a few years until retirement I'm gradually dialing down AA from 60/40 to 50/50. In the years between retiring and taking SS at 70 I will gradually ramp-it back up to 60/40 at age 70 (which is "good enough" for me).

At the same time I'm phasing-in ""Cut-Throat's famous 'Delay Social Security to age 70 and Spend more money at 62'," which is similar to what Sandi_K described above.
viewtopic.php?t=102609

I look at these as two sides of the same coin. In my head I calculate the overall plan in both bucket-approach and changing-AA terms.

By coincidence, after gradually dialing-down AA to 50/50 in the year I retire, the annual amount needed to gradually bring it back up to 60/40 at age 70 is very close to one-year's worth of withdrawals from the SS "bridge fund."

So in those bridge years I will have one "bucket" - the bridge fund - that is 100% cash (a CD ladder), and a second bucket - the permanent portfolio - that will remain 60/40. But the two together will add up to an AA of 50/50 in the first year of retirement, around 52/48 in the second, and so on until the bridge fund is liquidated and I'm back to 60/40.

It sounds more complicated to explain than it really is.

Per advice I've read here, my watchword in making these changes is do it in gradual, small steps.

~~~~~~~~~~~~~
ETA, what Wizard said applies to me also:
The Wizard wrote:
Mon Aug 13, 2018 7:24 am
1) at age 70, my income from immediate annuities + SS should be more than enough to cover my needs without regular portfolio withdrawals,

2) my Ability and Willingness to increase the risk level of my portfolio a bit are both good...
"I know nothing."

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Re: How can I use the Rising Equity Glide Path?

Post by dknightd » Mon Aug 13, 2018 12:12 pm

Darwin wrote:
Sun Aug 12, 2018 11:01 pm
I'm looking at a 40-year horizon.
How did you arrive at that number? There are so many variables.

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Re: How can I use the Rising Equity Glide Path?

Post by miles monroe » Mon Aug 13, 2018 2:44 pm

in one of their webcasts vanguard said this was not necessary and recommended against it.

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Re: How can I use the Rising Equity Glide Path?

Post by vineviz » Mon Aug 13, 2018 2:48 pm

miles monroe wrote:
Mon Aug 13, 2018 2:44 pm
in one of their webcasts vanguard said this was not necessary and recommended against it.
It’s certainly possible that someone at Vanguard holds that opinion, but it’s important to remember that lots of things that aren’t “necessary“ are good ideas nonetheless.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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Re: How can I use the Rising Equity Glide Path?

Post by willthrill81 » Mon Aug 13, 2018 3:56 pm

vineviz wrote:
Mon Aug 13, 2018 2:48 pm
miles monroe wrote:
Mon Aug 13, 2018 2:44 pm
in one of their webcasts vanguard said this was not necessary and recommended against it.
It’s certainly possible that someone at Vanguard holds that opinion, but it’s important to remember that lots of things that aren’t “necessary“ are good ideas nonetheless.
And I wouldn't expect one of the largest providers of target date funds, which use a falling equity glide path, to suggest that a rising equity glide path could be better. While I like Vanguard very much, it's a bit like asking a wolf if lamb stew is an appropriate meal option; you know what the answer will be before you ask the question.

If no one has an inherent problem with a retiree having a 30/70 portfolio or a 70/30 portfolio, then neither Vanguard nor anyone else should have a problem with retirees starting at the bottom of that range and finishing at the top. :D

Looking at this strategy from a more recent historic instance may be beneficial. Year 2000 retirees had the worst sequence of returns of any cohort since the 1970s. The 'bond tent' approach would have served them very well, far better than a static or declining equity glide path. Granted, this was because bonds did well during the first ~15 years of their retirement, while stocks had negative cumulative returns for a decade, but the point remains that a bond heavy portfolio during that crucial first decade of withdrawals minimizes sequence of returns risk. I'm a big stock proponent, but I cannot ignore this obvious fact.

Will this approach result in a smaller portfolio on average than using a static or declining equity glide path? To the extent that the future resembles the past, probably yes (though not necessarily since a higher equity allocation later in retirement could compensate). But this might provide retirees with more safety than otherwise.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: How can I use the Rising Equity Glide Path?

Post by Peter Foley » Mon Aug 13, 2018 4:14 pm

I'm not sure a rising equity glide path requires annual rebalancing.

I read the original paper and both Kitces' and Pfau's early commentaries. I think the basic premise is sound for many investors, especially those whose retirement savings allow for some but not a lot of discretionary spending. I too see no downside to being a bit conservative for a few years around one's retirement date and then, if one experiences a favorable sequence of returns, letting the equity portion drift upward.

Unless I were investing for my heirs, I personally would put guardrails on the process: Not less than 40% equities and not more than 60% equities.

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Re: How can I use the Rising Equity Glide Path?

Post by randomguy » Mon Aug 13, 2018 4:31 pm

heyyou wrote:
Mon Aug 13, 2018 10:37 am
Almost on topic:
McClung suggests starting with very near 50% in bond funds, then spending from only those bond funds, rebalancing when the equities have grown to 120% real (inflation adjusted) from retirement day, while 110% or 100% are only slightly less optimal rebalancing points. It is bond depletion with the same timing and effect as the rising equity method.

He is also withdrawing a calculated percentage of each recent annual portfolio value which would reduce the WD amount during periods of low market values. That too helps portfolio longevity. Using multiple small modifications seems like a good buffer for sequence risk. That risk is obvious when it occurs, for those who are paying attention, but that excludes the SWR retirees.

David Zolt calculated which inflation boosts to skip by those SWR retirement spenders as another method to avoid the damage from sequence risk.

Every one of those solutions involves spending slightly less, early in retirement if real returns are initially poor. Thus, it would be wise to have your necessary expenses be smaller than your expected retirement income. The big picture is living within your means still matters, however you choose to do that during the essential first decade of retirement spending.
The problem with the McClough scheme is that in the bad cases, you end up basically at 80%+ stocks after 10-12 years since you never touch 120% during that period. I am not sure I really have the stomach for sitting at 90/10 when I am 81 with something like 12x of expenses left.

The benefit to these types of plans tends not to be the rising glide path, bucket, bond tent or whatever they want to call it. It is the cutting of spending. If you cut your spending by 10%, the 3.6% SWR is pretty darn safe with a fixed AA.

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Re: How can I use the Rising Equity Glide Path?

Post by randomguy » Mon Aug 13, 2018 5:01 pm

willthrill81 wrote:
Mon Aug 13, 2018 3:56 pm


Looking at this strategy from a more recent historic instance may be beneficial. Year 2000 retirees had the worst sequence of returns of any cohort since the 1970s. The 'bond tent' approach would have served them very well, far better than a static or declining equity glide path. Granted, this was because bonds did well during the first ~15 years of their retirement, while stocks had negative cumulative returns for a decade, but the point remains that a bond heavy portfolio during that crucial first decade of withdrawals minimizes sequence of returns risk. I'm a big stock proponent, but I cannot ignore this obvious fact.

Will this approach result in a smaller portfolio on average than using a static or declining equity glide path? To the extent that the future resembles the past, probably yes (though not necessarily since a higher equity allocation later in retirement could compensate). But this might provide retirees with more safety than otherwise.

The question is how many times does holding a bond tent end up hurting you? How did the 1919 retiree do who had a big bond tent during the 20s and had a large stock allocation during the 30s do? You need to look at all the various cases (i.e. imagine a decade where bond returns are bad, stock market returns are good and then have decade where stock performance is bad for a bad case for the bond tent case) to see if you are just trading one risky case for another.

You can definitely damp volatility but the evidence of better results is pretty limited from what I have seen. Take the rising equity paper kitches put out. The optimal is 95.1% when you start at 30% and rise to 70%. Or you could hold 40/60 and have 94.7%. Or 60/40 and be 93.2%. Those are pretty small differences given all the assumptions that are going into the model. Same thing with the failure cases of picking up a couple tenths of a year.

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Re: How can I use the Rising Equity Glide Path?

Post by willthrill81 » Mon Aug 13, 2018 5:43 pm

randomguy wrote:
Mon Aug 13, 2018 5:01 pm
willthrill81 wrote:
Mon Aug 13, 2018 3:56 pm


Looking at this strategy from a more recent historic instance may be beneficial. Year 2000 retirees had the worst sequence of returns of any cohort since the 1970s. The 'bond tent' approach would have served them very well, far better than a static or declining equity glide path. Granted, this was because bonds did well during the first ~15 years of their retirement, while stocks had negative cumulative returns for a decade, but the point remains that a bond heavy portfolio during that crucial first decade of withdrawals minimizes sequence of returns risk. I'm a big stock proponent, but I cannot ignore this obvious fact.

Will this approach result in a smaller portfolio on average than using a static or declining equity glide path? To the extent that the future resembles the past, probably yes (though not necessarily since a higher equity allocation later in retirement could compensate). But this might provide retirees with more safety than otherwise.

The question is how many times does holding a bond tent end up hurting you? How did the 1919 retiree do who had a big bond tent during the 20s and had a large stock allocation during the 30s do? You need to look at all the various cases (i.e. imagine a decade where bond returns are bad, stock market returns are good and then have decade where stock performance is bad for a bad case for the bond tent case) to see if you are just trading one risky case for another.

You can definitely damp volatility but the evidence of better results is pretty limited from what I have seen. Take the rising equity paper kitches put out. The optimal is 95.1% when you start at 30% and rise to 70%. Or you could hold 40/60 and have 94.7%. Or 60/40 and be 93.2%. Those are pretty small differences given all the assumptions that are going into the model. Same thing with the failure cases of picking up a couple tenths of a year.
I agree that the marginal benefit of a bond tent seems pretty small. Regarding bond performance, don't forget that the 1919 investor didn't have access to TIPS.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: How can I use the Rising Equity Glide Path?

Post by Darwin » Mon Aug 13, 2018 9:48 pm

dknightd wrote:
Mon Aug 13, 2018 12:12 pm
Darwin wrote:
Sun Aug 12, 2018 11:01 pm
I'm looking at a 40-year horizon.
How did you arrive at that number? There are so many variables.
We have a flexible retirement timeframe... We could possibly retire (humbly) now at 48, but we enjoy our careers for personal reasons so will probably continue until closer to 60. As you say, there are a lot of variables.

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Re: How can I use the Rising Equity Glide Path?

Post by Darwin » Mon Aug 13, 2018 10:10 pm

willthrill81 wrote:
Mon Aug 13, 2018 3:56 pm
vineviz wrote:
Mon Aug 13, 2018 2:48 pm
miles monroe wrote:
Mon Aug 13, 2018 2:44 pm
in one of their webcasts vanguard said this was not necessary and recommended against it.
It’s certainly possible that someone at Vanguard holds that opinion, but it’s important to remember that lots of things that aren’t “necessary“ are good ideas nonetheless.
Looking at this strategy from a more recent historic instance may be beneficial. Year 2000 retirees had the worst sequence of returns of any cohort since the 1970s. The 'bond tent' approach would have served them very well, far better than a static or declining equity glide path. Granted, this was because bonds did well during the first ~15 years of their retirement, while stocks had negative cumulative returns for a decade, but the point remains that a bond heavy portfolio during that crucial first decade of withdrawals minimizes sequence of returns risk. I'm a big stock proponent, but I cannot ignore this obvious fact.

Will this approach result in a smaller portfolio on average than using a static or declining equity glide path? To the extent that the future resembles the past, probably yes (though not necessarily since a higher equity allocation later in retirement could compensate). But this might provide retirees with more safety than otherwise.
This gets to the heart of my question. I'm in a situation where "enough" is great, and I'm less interested in dying with a large portfolio, than to ensure (in the near term) that an unfortunate retirement date doesn't distort an otherwise well-planned lifetime of investment... if not for me, then definitely for my wife!

I heard a quote once (unsure of source) "Expenses plus $1 equals happiness, expenses minus $1 equals misery".

BTW, thanks for all the good info from everyone, this has been helpful.

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Re: How can I use the Rising Equity Glide Path?

Post by Hyperborea » Mon Aug 13, 2018 10:35 pm

dknightd wrote:
Mon Aug 13, 2018 12:12 pm
Darwin wrote:
Sun Aug 12, 2018 11:01 pm
I'm looking at a 40-year horizon.
How did you arrive at that number? There are so many variables.
The question wasn't directed at me but I use actuarial joint life calculations to 10% for my wife and I. At retirement that was just below 50 years.
"Plans are worthless, but planning is everything." - Dwight D. Eisenhower

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Re: How can I use the Rising Equity Glide Path?

Post by Sandi_k » Mon Aug 13, 2018 11:41 pm

Darwin wrote:
Mon Aug 13, 2018 10:10 pm

I heard a quote once (unsure of source) "Expenses plus $1 equals happiness, expenses minus $1 equals misery".

BTW, thanks for all the good info from everyone, this has been helpful.
It's Dickens:

Mr Micawber's famous, and oft-quoted, recipe for happiness:

"Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

Charles Dickens, David Copperfield

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Re: How can I use the Rising Equity Glide Path?

Post by Darwin » Mon Aug 13, 2018 11:58 pm

Sandi_k wrote:
Mon Aug 13, 2018 11:41 pm
Darwin wrote:
Mon Aug 13, 2018 10:10 pm

I heard a quote once (unsure of source) "Expenses plus $1 equals happiness, expenses minus $1 equals misery".

BTW, thanks for all the good info from everyone, this has been helpful.
It's Dickens:

Mr Micawber's famous, and oft-quoted, recipe for happiness:

"Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

Charles Dickens, David Copperfield
Thanks!!!!!!
The morphing of a quote. Funny.

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Re: How can I use the Rising Equity Glide Path?

Post by randomguy » Tue Aug 14, 2018 1:50 am

willthrill81 wrote:
Mon Aug 13, 2018 5:43 pm


I agree that the marginal benefit of a bond tent seems pretty small. Regarding bond performance, don't forget that the 1919 investor didn't have access to TIPS.

Didn't have access to index funds either;) You can change up the portfolios (Bergan believes the 4.5% rule these days since he realized if you put 30% of your money in stocks it improves the returns of the 1966 edge case. Hope he doesn't discover gold:)) and get different results. You hope TIPS would help you when the 70s strike but they might also hurt you in the great depression when deflation hits.
I would love to see some portfolio magic that ups SWR to say 5% by messing around with AA and the like over time. I just haven't seen anything that I believe enough in. You rapidly are playing the market timing and back testing curve fitting game over a pretty small set of data.

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Re: How can I use the Rising Equity Glide Path?

Post by Sandi_k » Tue Aug 14, 2018 11:16 am

randomguy wrote:
Tue Aug 14, 2018 1:50 am
I would love to see some portfolio magic that ups SWR to say 5% by messing around with AA and the like over time. I just haven't seen anything that I believe enough in. You rapidly are playing the market timing and back testing curve fitting game over a pretty small set of data.
https://earlyretirementnow.com/2016/12/ ... t-1-intro/

Even 100% stocks only show a historic 82% success with 5% withdrawal rates over 30 years.

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Re: How can I use the Rising Equity Glide Path?

Post by Darwin » Tue Aug 14, 2018 12:01 pm

I would love to see some portfolio magic that ups SWR to say 5% by messing around with AA and the like over time. I just haven't seen anything that I believe enough in. You rapidly are playing the market timing and back testing curve fitting game over a pretty small set of data.
[/quote]

I haven't really heard the "increase-SWR" possibility being a focus in the Increasing Equity Glidepath discussion. The focus (and my interest) is more oriented towards reducing exposure during the unstable period immediately before and after one's retirement date.

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Re: How can I use the Rising Equity Glide Path?

Post by randomguy » Tue Aug 14, 2018 1:19 pm

Sandi_k wrote:
Tue Aug 14, 2018 11:16 am
randomguy wrote:
Tue Aug 14, 2018 1:50 am
I would love to see some portfolio magic that ups SWR to say 5% by messing around with AA and the like over time. I just haven't seen anything that I believe enough in. You rapidly are playing the market timing and back testing curve fitting game over a pretty small set of data.
https://earlyretirementnow.com/2016/12/ ... t-1-intro/

Even 100% stocks only show a historic 82% success with 5% withdrawal rates over 30 years.
That is a result of poor portfolio selection.

60% SV, 40% LT treasuries has a 95.9% success rate at 5% with 1 failure ~ year 20 and the other in year 29. Heck for 40 years you still have 94.9%. The question is do you (or anyone) believe enough in factor investing to do this? I sure don't:) And that is a simple fixed AA. Start playing games like the various bucket strategies and bond tents and you can get better results. But how much of that is just curve fitting, I will leave up to you.

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Re: How can I use the Rising Equity Glide Path?

Post by Peter Foley » Tue Aug 14, 2018 2:29 pm

If you want to take a look at increasing your withdrawal rate to 5% you should read the following: Note that the link on the Wiki no longer works:

Jonathan Guyton, Withdrawal Rules: Squeezing More From Your Retirement Portfolio
"...most [SWR] research has centered on withdrawal rules that are quite static... yet most retirees have the ability to modify their annual spending, at least to some degree. Would the ability to make small systematic modifications if investment performance is poor increase the safety of an investment portfolio and allow for slightly higher withdrawal rates?

I read this some time ago - 8 to 10 years ago. His basic premise was that if you do not take an inflationary increase during down market years you can withdraw at a higher rate. It is more subtle than this, but that is the general approach he proposes. He uses the term "Guardrails" with respect to safe withdrawal rates.

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Re: How can I use the Rising Equity Glide Path?

Post by randomguy » Tue Aug 14, 2018 3:10 pm

Peter Foley wrote:
Tue Aug 14, 2018 2:29 pm
If you want to take a look at increasing your withdrawal rate to 5% you should read the following: Note that the link on the Wiki no longer works:

Jonathan Guyton, Withdrawal Rules: Squeezing More From Your Retirement Portfolio
"...most [SWR] research has centered on withdrawal rules that are quite static... yet most retirees have the ability to modify their annual spending, at least to some degree. Would the ability to make small systematic modifications if investment performance is poor increase the safety of an investment portfolio and allow for slightly higher withdrawal rates?

I read this some time ago - 8 to 10 years ago. His basic premise was that if you do not take an inflationary increase during down market years you can withdraw at a higher rate. It is more subtle than this, but that is the general approach he proposes. He uses the term "Guardrails" with respect to safe withdrawal rates.
That is independent to trying to come up with a portfolio/AA scheme that allows high SWR. Once you allow for reduction of SWR, a ton of options open up depending on what you are trying to do and your preferences from what you want from the portfolio. With The Guyton scheme and SV, you probably could start at 6%:)

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