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. Year 2000 retirement: a 4% SWR reality check Almost exactly a year ago I wrote a brief thing on Year 2000 retirees.medium.com 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…