Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
Gregg Fisher: What's A Sustainable Portfolio Withdrawal Rate ?
After my parents reached the point that age was affecting their ability to make good decisions I took over the management of all family money and affairs. Since, their investments had reached critical mass and they had made good choices in preparing for retirement there was not a need to draw down investment principal.
My strategy was a simple one. I took 1.25% per quarter from the portfolio’s closing valuation and moved this sum to a cash reserve and disbursement account. When the money was needed it was easily accessed … and, I never had a cash crunch. Some quarters I drew upon reserves and sometimes I did not but I continued to fund the reserve account as I described above even when it was not needed. And, oh by the way, I grew the investment principal, over time, so the amount taken each quarter for the most part grew in size.
Now that I have reached retirement, I plan to do much the same; and, I have started my distribution rate at 0.75% per quarter to fund my cash reserve and disbursement account.
The value of assets appreciated over time and thus the principal grew with capital value increase. In addition, many of the investments kick off a good income stream that was mine if I chose to take or could be used to purchase additional securities.
Comments
My strategy was a simple one. I took 1.25% per quarter from the portfolio’s closing valuation and moved this sum to a cash reserve and disbursement account. When the money was needed it was easily accessed … and, I never had a cash crunch. Some quarters I drew upon reserves and sometimes I did not but I continued to fund the reserve account as I described above even when it was not needed. And, oh by the way, I grew the investment principal, over time, so the amount taken each quarter for the most part grew in size.
Now that I have reached retirement, I plan to do much the same; and, I have started my distribution rate at 0.75% per quarter to fund my cash reserve and disbursement account.
Old_Skeet
how?
The value of assets appreciated over time and thus the principal grew with capital value increase. In addition, many of the investments kick off a good income stream that was mine if I chose to take or could be used to purchase additional securities.