but cash instruments are the biggest risk of all.
we have had 125 rolling 3 year retirement periods to date .
drawing 4% inflation adjusted with a 50/50 portfolio has ended 90% of all those periods with more than they started with .
using cash instruments at just a 4% inflation adjusted draw has failed to last thru 65% of those periods .
people have their idea of risk backwards.
cash instruments have had negative real returns thru 70% of all years after inflation and taxes .
thats losing money anway you care to look at it.
just because you can live on an amount you choose to. draw doesn’t mean its the safest choice .
i worked all my life for my money , now its time for my money to work for me .
what i never wanted is my money taking some low end job with a lot of risk to itself from inflation
which is why even in retirement i make sure my money has a good paying job
so here are the actual results.
this is a 4% adjusted draw. using 40% equities starting with a 1,000,000 dollars , but results are identical starting with 10ok as far as success rate of it lasting the 30 years
FIRECalc Results
Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.
FIRECalc looked at the 125 possible 30 year periods in the available data, starting with a portfolio of $1,000,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 125 cycles. The lowest and highest portfolio balance at the end of your retirement was $-187,735 to $3,751,122, with an average at the end of $913,855. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 8 cycles failed, for a success rate of 93.6%.
below are the results of using only fixed income
FIRECalc Results
Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.
FIRECalc looked at the 125 possible 30 year periods in the available data, starting with a portfolio of $1,000,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 125 cycles. The lowest and highest portfolio balance at the end of your retirement was $-517,560 to $2,349,575, with an average at the end of $189,882. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 64 cycles failed, for a success rate of 48.8%.
is 100% fixed income . you can see the risk of if not lasting is insanely high . that is the real risky choice unless one was going to take a even smaller draw , making very inefficient use of their money.
people need to understand the difference between risk vs just volatility , which is the up and down cycles of the markets
