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

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.

Not that simple, since your RMD percentage will increase every year. :shrug:

It depends on when you will require Depends.

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.

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.

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

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.

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.

True, but just because you have to withdraw more than 4% due to RMD, doesn't mean you can't just reinvest it into a taxable brokerage account that you open at Scottrade for example. Currently, I don't withdraw anything from my IRA's living only on SS and my pension. When I turn 70 1/2 I will, of course, be subject to making withdrawals from my IRA's but right now I just plan on spending the first 4% of that withdrawal and reinvesting the rest in a taxable account until I decide it is time to just blow it all !

I heard of a fellow who spent almost all his money on wine, women and song. The rest he blew.

Love it!!

Bogle: Tough Decade Ahead for Equity Investors

Jack Bogle the founder of Vanguard and index style investments voices his opinion on the next 10 years. It is very sobering.

Okay, I'll bite. Why?