Guidelines
Here are some guidelines to help you interpret and apply the contents of this board.
Updated: July 11, 2008.
They Got It Wrong
Five Great Choices
Starting at 5%
Read this for a jump start.
Starting at 5%
Starting at 5% with Risk
6% for Early Retirement
Getting Started
Here are some great posts for newbies:
May Highlights
Always Insist on a baseline
TIPS Table
The Rule of 25
Safe Withdrawal Rates with Switching
Pay special attention to these two posts. They answer the question:
You will be retiring soon. You haven't thought through your finances. What should you do?
Remember that your starting point is from a baseline withdrawal rate of 4.46% plus inflation over 30 years. Even if stock prices never become attractive enough to you, you need not do any worse than this.
What Should You Do?
What Should You Do: Addendum?
Here is my first attempt at dividend-based design. It turned out to be a great success. It should be of special interest to those just starting out.
This approach delivers 4.0% (plus inflation) far into the future. The downside risk is a four year reduction of 5%, which would be a withdrawal rate of 3.8% (plus inflation), followed by 4.0% or more (plus inflation).
I have followed the example with a Dividend-Based Design Outline. We are up to 4.8% (plus inflation), safely and perpetually, starting from today's market.
For a quick read, see the Dividend Sound Bite.
Guidelines Articles List
Building Blocks
I have posted a lot of articles with lots of numbers. Those numbers are meant to help, to provide assistance, to supply insights. They tell you can do. The let you know what to look for. They do not tell you what you must do.
Lots of details are not found in numbers. Lots of details are unique to your own situation. This article helps you bring everything together.
Building Blocks
Building Blocks: Edited
The 4% Shocker
Pay attention to this one.
The 4% Shocker
Using SWR Analysis to Compare Asset Classes: Edited
Here are some of Rob Bennett’s thoughts about using SWR analysis to compare asset classes. He has done this for years.
Using SWR Analysis to Compare Asset Classes: Edited
Why PE10?
Many people have been convinced that there is no meaningful way to predict stock market returns. Don’t fall into that trap.
I have taken an article from Professor Robert Shiller’s web site and edited it heavily.
Why PE10?
The "You Can't Count on 7%" Series of Posts
Here is a series of posts that start out with some gloomy news. But it ends up with a very positive message.
The "You Can't Count on 7%" Series of Posts
Adopting a New Approach
You may have found one of my approaches compelling. In my latest, you start with an all-TIPS portfolio. Later, you buy high dividend stocks from high quality companies, but only at reasonable prices.
Here is how you go about adopting one of my approaches.
Adopting a New Approach
Using Stock Return Predictions
According to the Stock-Return Predictor, the most likely return of stocks will be 1.3% (plus inflation) ten years from now. Today’s TIPS yield 2.5% (plus inflation).
Does this mean that we should invest entirely in TIPS?
No. Not necessarily.
Using Stock Return Predictions
5% the Hard Way
Reaching a 5% withdrawal rate with a dividend strategy is easy. Reaching 5% with a liquidation strategy, where you sell shares, is difficult. This is how you do it.
5% the Hard Way
5.5% with Corporate Bonds?
Back of the Envelope 6%
Here is a simple way for traditional retirees to withdraw 6% (plus inflation) while leaving an inheritance. You can adjust it for any level of risk.
Back of the Envelope 6%
More Guidelines
Here are additional guidelines.
More Guidelines