4 percent rule to high?

4 percent rule to high?

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4 percent rule to high?
  #1  
Old 09-02-2015, 11:51 AM
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Default 4 percent rule to high?

This will be of interest to those that follow the 4% safe withdrawal rate discussions.

Why 4 percent rule Could Fail

  #2  
Old 09-03-2015, 01:23 PM
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I subscribe to the KISS theory, (keep it simple stupid).

I only apply the 4% rule for RMD, at 70 1/2 years old. That would put one at 95 1/2 years old.

Heck, if I make that age, I would be extremely happy. Besides, I figure that some of that RMD, would stay in other accounts, that would still be making money.

No one knows if medical cost would make one go broke, so one can only plan with some certainty. I for one, don't put too much stock in financial analysts that says, one solution fits all.
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Old 09-03-2015, 02:47 PM
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Quote:
Originally Posted by 2BNTV View Post
I subscribe to the KISS theory, (keep it simple stupid).

I only apply the 4% rule for RMD, at 70 1/2 years old. That would put one at 95 1/2 years old.
Not that simple, since your RMD percentage will increase every year.
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  #4  
Old 09-03-2015, 05:48 PM
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It depends on when you will require Depends.
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  #5  
Old 09-03-2015, 09:26 PM
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Quote:
Originally Posted by 2BNTV View Post
I subscribe to the KISS theory, (keep it simple stupid).

I only apply the 4% rule for RMD, at 70 1/2 years old. That would put one at 95 1/2 years old.

Heck, if I make that age, I would be extremely happy. Besides, I figure that some of that RMD, would stay in other accounts, that would still be making money.

No one knows if medical cost would make one go broke, so one can only plan with some certainty. I for one, don't put too much stock in financial analysts that says, one solution fits all.
Based on historical returns the RMD is better than the 4% because it uses the year end investment balance. But the RMD % increases each year.

See http://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf for a worksheet on how to calulate the RMD.
  #6  
Old 09-04-2015, 06:42 AM
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A pretty much fail safe plan is to keep $2 million in cash for emergencies and to weather any downturns in the markets. Keep the rest of your money in lifestyle type funds that diversify and rebalance your money among several index funds.
  #7  
Old 09-04-2015, 01:43 PM
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Th article states that retirement planning is relatively new? Retirement planning as been around my entire working life?

One option I selected was to build a ladder with my retirement saving that I could tap at the needed time. Another is to continue to save and invest.

My biggest concern is not whether I invested properly or if it will last because as i sit now my goal to pass my estate to my offspring is on target. However the state of our economy and the people running it don't seem qualified to lead including the FED which I believe should be abolished. We need to have regulations removed to assist business, reinstatement of decent interest for earnings/savings a reduction in taxes and a revamping of our tax code
  #8  
Old 09-05-2015, 01:51 AM
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If you haven't reached 70 1/2, now would be a good time to look at a Required Minimum Distribution calculator. In a conventional IRA you are required to withdraw $$$ from your IRA (not a Roth IRA) based on these calculations. This means your withdrawal rate will force your IRA depletion whether you want to or not. Assuming you live that long.
Add these withdrawals to your other taxable income sources.
I retired in 2000 and my IRA has been managed over the years by several advisors on the Barron's top 100 list. Those advisors investment performance has been underwhelming after the ever popular 1% management fee.
Again, if you have a conventional IRA check out the RMD calculator.
For a laugh I found an IRA projection I received in 2000 when the numbers used were based on annual returns of 9%. Still dreaming of the good old days.
  #9  
Old 09-05-2015, 05:50 AM
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I'm worried I may have to go back to work...What does the smart people think of Pimco's PHK?
  #10  
Old 09-05-2015, 08:06 AM
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Quote:
Originally Posted by Greg Nelson View Post
I'm worried I may have to go back to work...What does the smart people think of Pimco's PHK?
Don't worry. Work is good for the soul. I wish I had to go back to work.
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