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I have this intuition that withdrawal rates are far more important than asset allocation. Whether you withdraw 3% versus 4% is far more important than whether you have an 80/20 portfolio versus, say, a rising equity glidepath.

But how to test that intuition? How to quantify it and puts some…


You’ve probably heard talk about the key role that reinvesting dividends play in total returns.

This CNBC article from 2010 says “dividends make up 90% of total return”.

Since 1970, more than 80 percent of European equity returns came from dividend yield and growth, it stated, citing data from GMO.


I’ve long been dubious about the hand-wringing around retirement savings in America. There is certainly room for improvement but I’ve never been convinced it is quite as dire as op-ed columns and media reports make it out to be. In particular, median personal income in the US is $33,706. So…


Variable withdrawal schemes can often see us cut our withdrawals dramatically in retirement. It is tempting to add some kind of floor — a minimum withdrawal that we won’t go below. “Sure, the algorithm says to withdraw $27,500 this year. But that would represent an unacceptable reduction in my standard…


This is more of a “look how easy pandas & friends make it to investigate things” than anything fully baked. Closer to a tutorial than anything else. But it was small & self-contained but also not an entirely contrived example, so I thought it would be worth sharing.

As we…


In 2017 I wrote the second edition, updating how a Year 2000 retiree has actually done.

Apparently I didn’t bother to do one for 2018. Now that 2019 is over we can update things again. The retiree is now 20 years in. 2/3rds of the way done. 46% of male…


One widely known, but little discussed, aspect of the 4% rule is that is has a severe flaw around timing of retirement.

Adam and Bob identical twins, working identical jobs, and investing identically. Both 65 years old and both have $1,000,000 invested in an S&P 500 index fund. Adam decides…


“Optimal lazy rebalancing” is a technique that Albert H. Mao wrote an online calculator for a number of years ago.

Avoid these issues by being as lazy as possible: only rebalance as you contribute to or withdraw from your portfolio, avoid selling assets when you contribute, and avoid buying assets…


I think the Funding Ratio is a pretty great tool for retirement planning. It can easily take into account your entire balance sheet — things like pensions, Social Security, and downsizing your house. It can easily handle different amounts of spending every year. And, with a bit of arithmetic re-arrangement…


When we use the PMT calculation to guide our retirement planning, we need to pick a “rate” as one of the parameters. What that rate should be is somewhat subjective, with various philosophies on how it should be chosen. Should we pick the long-term historical market average? Should we use…

EREVN

Learn how to enjoy early retirement in Vietnam. With charts and graphs.

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