Charles Rotblut, CFA, is among an impressive staff of
analysts-writers-thinkers at AAII. In the May 2013 issue of AAII Journal, he
provides a lengthy analysis of a matter of prime concern to those of us who are
retired and to those of you who are nearing retirement:
His well-diversified model portfolio (70% stocks, 30% bonds)
tests the popular 4% withdrawal rate widely recommended to retirees.
A table based on such withdrawals features certain Vanguard
no-load mutual funds and begins with 1988 and ends with 2012.
I much prefer Rotblut’s real-life approach to retirement
planning over that of the so-widely-advertised “15 Minute Retirement Plan,”
which begins with a faulty premise. It requires us to decide how long we’re
going to live.
That’s something impossible to know if you’re not suicidal and
reasonably healthy—especially so, given the probability of medical
breakthroughs continuing year by year and predictions of the end of cancer by 2020 and the
end of heart disease perhaps even sooner.
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