@stillers, @sma3,
Couple questions for you...
@stillers...I need to read your post carefully as it resonates with me...question if you are ok answering...by chance did you move to a lower tax state when you retired? I'm in a very high tax state but also own a home in a much lower tax state...wife and I are thinking of making the move in the next year or so.
....
Best,
Baseball Fan

No, we did not relocate. We've paid zero FIT/SIT post-retirement due to the structuring of our portfolio (detailed in prior post) since we started investing in 1980. Large part of our investment strategy, thanks to my first boss and investment mentor, has always been that tired, old axiom, "It's not how much you make, it's how much you get to keep." We do however live in a state with highly favorable tax treatment for retirees.

I enjoy reading the MFO articles. Anybody have thoughts regarding the article mentioning .....a 20% equity portfolio translates into receiving 60% of the returns of an all equity portfolio with about 25% of the volatility? Just a Thinking Fast and Slow type observation....volatility (SD) is a annualized metric that would remain in this case relatively consistent over time around 25% but the 60% yearly returns vs SPY compounded over a 30 year retirement horizon would not be 60% after 30 years. A significant difference in return. IOW's the value one receives from low SD does not compound over time. Although there is value inherent.

@stillers, @sma3,
Couple questions for you...
@stillers...I need to read your post carefully as it resonates with me...question if you are ok answering...by chance did you move to a lower tax state when you retired? I'm in a very high tax state but also own a home in a much lower tax state...wife and I are thinking of making the move in the next year or so. Question for all: Has anyone else moved to lower taxes in retirement? Did it work as planned? Happy with decision?
@sma3...agreed floating rate funds scare me...usually not highest rated bonds....took a real flush in the down draft in 2020.
I too am concerned about the rattling, swift elevator down in the markets...who knows...
Another fund I am dabbling with (and have owned in the past before it stalled out) is PMEFX, Penn Mutual 1847 Income fund. Really like the mgr who used to run Berwyn Income...seems like a fund you might be able to hang onto in "rough waters". I like the fund mgr's poise and thought process in the interviews I've seen him on.
Best,
Baseball Fan

Not a lot of port moves specifically for 2022. We are nearing end of 10th year of retirement. We use 5-yr retirement portfolio strategies and are nearing the end of our 2nd 5-yr plan (June 2022). All major moves towards next 5-yr plan have been gradual/cumulative over past six months or so and will be completed by June.
Core for next five years will consist of 11 AA OEFs (and possibly 1-2 more) that can be detailed here or via PM if anyone is interested. Still reluctantly holding a smaller slug of dedicated bond OEFs (HY Munis, BL, Multi, ST HY), significantly reduced in number and aggregate $ amount from initial 5-yr plan plan. Also initiated much larger explore section during 2nd, 5-yr plan that will carryforward in next one, comprised of a coupla indivdual stocks and a coupla dedicated stock ETFs and OEFs. Former 10-yr CD ladder initiated at start of retirement continues to see final rungs fall off w/o being replaced. Maturing CD proceeds continue to be rolled to much higher risk cats, primarily explore stuff. Keeping an eye on 5-yr CD rates this year as they inch back to levels that may be acceptable replacements for some dedicated bond OEF holdings.
Will continue to make (what are effectively) tax-free IRA w/d's for personal spending wants/needs up to taxable income threshold in lieu of making Roth conversions. Continue to be ~96% under the umbrella (read, in tax-deferred a/c's) and ~4% in taxable. Haven't paid a dime in FIT/SIT since final year of employment in 2012 (state has actually been paying us $50 annually last coupla years via tax credits) and starting to look like that will all continue for at least five more years or until RMDs are um, required. Life-long tax planning strategy has been to Avoid, Defer, Minimize, and pay them on our terms when we want (read, ultimately have) to pay them.
REALLY appreciated the contributions of many of MFO regulars. Keep up the great work and contributions here and Happy New Year to all!

Our KISS of a portfolio ended the year with 80% in PRWCX/TRAIX and 20% in AKREX. So, not a bad year with low to mid 70's exposure to equities by year end.
Our average age is 56 and probably have been on the light side of equities for our age the past 15 years since PRWCX has dominated our investments, but we are okay with that. We'll keep saving, but probably have enough saved for retirement already, just need to keep growing it at a modest rate for the next handful of years. Grateful to be debt free.
Have decided equity exposure is a bit higher than preferred at this point and am in the process of reducing AKREX and moving some of the proceeds into TRAIX and PRFRX for now which is also holding some inheritance monies my wife received recently from her folk's estate. Planning for our equity exposure to be between 65-70% when done rebalancing.

It is complicated. I am not sure why there is so much focus on the "4%" rule when the IRS forces people over 75 to remove 4.07% of your retirement accounts. By 80 it is up to almost 5%.

This conflates 4% of starting amount (inflation adjusted) with 4% (or 5%) of remaining balance.
The 4% rule is supposed to enable one to spend down savings so that they are not depleted for at least 30 years. But the savings are, or may be, depleted at some point past that.
As one draws down one's savings, the 4% of the original value gradually evolves into 5%, 6% and more of the remaining balance. The RMD calculation is designed to automate this while adjusting for a gradually growing life expectancy.
That is, as one grows older without dying, one's expected lifetime expands. So year by year, one needs to plan on living longer and draw down a bit slower (as a fraction of remaining assets).

While I don’t know what moves I may make for 2022, I have done a cursory review of what happened to my portfolio last year. Global growth stunk up the joint with MGGPX the worst offender with APFDX and ARTRX taking nose dives in the last few months of the year. Global allocation, as in RPGAX, was also a drag. Our biggest domestic growth fund, BIAWX, did fine, but trailed SPYG. TIEIX, the biggest position in the retirement account, outperformed the Nasdaq while rising 23%. EM was a bad joke, represented by ARTYX, who was shown the door a while back. Foreign large growth, PWJZX, was very volatile; up 13%, it failed to return even half of the S&P 500. I have more work to do on this long holiday weekend.

just an odd fyi --- DSTL (like CAPE) is 'blocked' at ML, cannot be bought, at least in my accounts (retirement and brokerage)

For what it’s worth, we are spending much less in retirement so far than 4% annually. COVID has made it difficult to meet our spending “goals” because it’s so difficult and risky to travel, eat out and participate in other forms of entertainment. In January, I will have been retired 5 years and my wife 7 years, and we have yet to spend one dime of our retirement savings. We’ve been getting by just fine from our pensions, my wife’s social security and modest withdrawals from taxable savings. I’m holding off drawing from my SS because so far we simply haven’t needed it.

It is complicated. I am not sure why there is so much focus on the "4%" rule when the IRS forces people over 75 to remove 4.07% of your retirement accounts. By 80 it is up to almost 5%.
While I am irritated by a lot of the smugness at American Association for individual investors, one of their key points is "if the SP500 is within 5% of all time high, take money out of equities; if it is not, take money out of something else"

Good plan @rono.
Automatic investment plan (AIP) is a great way to learn and get in the habit of saving. I started AIP with the workplace plan in the 70s and than later for non-retirement investing in the 90s. Still use it today for efficient budget management. TRP has some great funds to use for the purpose. If you’ve been reading the board, some of us have soured on their service. Fido might be my choice today.

If this money is for retirement and not for a home or family in the next 10 years, the Roth is the best idea hands down.
I think if I was starting out and had 1 investment to start with, I would just buy QQQ and don't worry about diversification at that young age. Technology was a great investment 40 years ago, 20 years ago, 10 years ago and no reason to think differently in the future.
And I can't for the life of me think why a senior in high school whose only obligation for the next 4-5 years is to concentrate on a college degree, and being an only child with parents having good jobs as you described would ever need an emergency fund. It's not like he has to worry about losing his job and have to pay the families bills. This may be the best time of his life to invest as much as possible for the future without having other life-obligations that will certainly come in the future.
I'm very impressed with this young man wanting to understand finance at this young age.

What Type Of Retirement Spender Will You Be?

One final study should be considered to help shed light on retirement spending patterns and which default assumptions could be appropriate for different types of retirees. In August 2015, J.P. Morgan Asset Management released a study about retirement spending by Katherine Roy and Sharon Carson.
Their dataset provides a “big data” analysis of 613,000 U.S. households led by people fifty-five or older who were estimated by the researchers to have managed most of their household finances through banking services at Chase (debit and credit cards, pay mortgages through bank account, etc.).
In analyzing the expenditures for their diverse consumer base, they identified four retirement spending profiles and an additional category of miscellaneous individuals. These are the profiles they found

https://retirementresearcher.com/type-retirement-spender-will/

The retirement drawdown “smile”:

Retirement spending drops off over the first half…then picks up again in the second…half due to healthcare spending

https://retirementresearcher.com/retirement-spending-smile/

@bee, as always thank you for the links. Took pre-retirement class at work, but there are many aspects of preparation for the drawdown and taxes.
@crash, the natural disaster are very hard for many people, especially in countries where the government don't have much resources for their citizens.

Absolutely right. But then... If the people--- elected, appointed officials--- are supposed to serve the population, then it stands to reason that systemic corruption militates against that chief goal. Yet when EVERYONE buys into that (corrupt) mindset, everyone then fails to recognize it. Corruption becomes business as usual. People deserve MUCH better, but in the end, "we get the leaders we deserve." (Bill Maher.)

@bee, as always thank you for the links. Took pre-retirement class at work, but there are many aspects of preparation for the drawdown and taxes.
@crash, the natural disaster are very hard for many people, especially in countries where the government don't have much resources for their citizens.

?
yes, that is what I was referring to. Is ORP related to
https://www.newretirement.com/retirement/5-steps-for-defining-your-retirement-drawdown-strategy/
?
ah, I see that PoF thread has ref to Kitces and thence to ORP; is that what you are referring to?

For the love of Pete...I hope there are NOT any blog entries by any "FIRE" proponents who burnt out from the corporate world, stated they retired early, got a van to escape reality but in reality are still working writing a blog which contains "financial investment porn", securing eyeballs so they can post and monetize digital ads.
Just like Elizabeth Warren, AOC, Bernie Sanders...just go away. Everyone is tired of your nonsense and general kookiness.
It's kind of like when you put on a suit and tie and are a white dude...no one questions you or looks at you funny when you walk into a store....you write an investment porn blog and just because you get a following that makes you an expert? Never take investment advice from anyone who doesn't have over $10MM. As Josh Brown refers to in is book, "How do you invest, show me your portfolio". Sheet.
Apologies for the snark. Sincerely DO appreciate the post.
In reality, all snark aside, I do truly believe the only safe retirement plans are for those who have a gov't pension and live in a "blue" state and will suckle off the teets of their fellow tax payers, come what may. The rest of us are all somewhat gambling in the casino and left to the whims of government monetary and fiscal policy.
Maybe, just maybe, keep it simple, control your spending, stay healthy as much as possible, don't take on too much risk (meaning either too aggressive investments or too conservate (guilty as charged))
Best,
Baseball Fan

For anyone considering recognizing more gain or doing more Roth conversions this year, I ran across a couple of quirks in the way gains may be taxed.
Suppose you have short term gains (say, $3000) and long term losses (say -$1000), so that you're net positive (+$2,000 short term). Not a common situation, but here added long term gains can get taxed at short term (ordinary income rates).
In this example, if you generate an extra $500 in long term gains, that reduces the LT loss by $500, thus increasing the net short term gains by $500: Net LT loss = $500, net gain (short term) = $3000 - $500 = $2500.
----
If your income is in the region where some but not all cap gains are taxed at 0%, then adding $1 of ordinary income can increase your taxes by 27¢, i.e. it's taxed at 27%. Kitces has an excellent piece on this; see examples 3 and 4.
https://www.kitces.com/blog/long-term-capital-gains-bump-zone-higher-marginal-tax-rate-phase-in-0-rate/
He discusses how in this situation it is preferable to generate long term gains (even if taxed at 15%) as opposed to doing Roth conversions (even if nominally taxed at 12%). Going further, if one doesn't have much in cap gains/qualified divs, ISTM that it can still make sense to convert all the way up to the next tax bracket. A small amount will get taxed at 27%, but with little in cap gains, most will get taxed "normally". But if one has lots of cap gains that would get pushed into the 27% bracket, it pays to defer converting.
This suggests a multiyear strategy for planning periodic sales of assets and Roth conversions. It can be advantageous to lump them into alternating years. One year you take two year's worth of gains (taxed at 0% or 15%). The next year you work to minimize your cap gains (so there are few gains to get taxed at 27%) and convert more retirement money. Even if those conversions push you into the 22% bracket, that's still better than having a lot of cap gains taxed at 27%.
One needs to look at how much in gains one expects to recognize (including fund distributions), how much one wants to convert, other ordinary income, to see if this lumping strategy helps.

Additional links can be found in the link I included below:

“The Chain”
As you’ll see in the P.S., we’re trying something new in the blogosphere. We’re “Building A Chain” of blog articles, where different bloggers are sharing their detailed Drawdown Strategy. To help keep track, I’ll edit this post as new “links” are added in the chain. Eventually, we’re planning on compiling these into an e-book, and donating all proceeds to charity. Thanks to the following bloggers who have joined “The Chain Gang”!!
Anchor: Physician On Fire: Our Drawdown Plan in Early Retirement
Link 1: The Retirement Manifesto: Our Retirement Investment Drawdown Strategy
Link 2: OthalaFehu: Retirement Master Plan
Link 3: Freedom Is Groovy: The Groovy Drawdown Strategy
Link 4: The Green Swan: The Nastiest, Hardest Problem In Finance: Decumulation
Link 5: My Curiosity Lab: Show Me The Money: My Retirement Drawdown Plan
Link 6: Cracking Retirement: Our Drawdown Strategy
Link 7: The Financial Journeyman: Early Retirement Portfolio & Plan
Link 8: Retire By 40: Our Unusual Early Retirement Withdrawal Strategy
Link 10: Early Retirement Now: The ERN Family Early Retirement Captial Preservation Plan
Link 11: 39 Months: Mr. 39 Months Drawdown Plan
Link 12: 7 Circles: Drawdown Strategy – Joining The Chain Gang
Link 13: Retirement Starts Today: What’s Your Retirement Withdrawal Strategy?
Link 14: Ms. Liz Money Matters: How I’ll Fund My Retirement
Link 15a: Dads Dollars Debts: DDD Drawdown Part 1: Living With A Pension
Link 15b: Dads Dollars Debts: DDD Drawdown Plan Part 2: Retire at 48?
Link 16: Penny & Rich: Rich’s Retirement Plan
Link 17: Atypical Life: Our Retirement Drawdown Strategy
Link 18: New Retirement: 5 Steps For Defining Your Retirement Drawdown Strategy
Link 19: Maximize Your Money: Practical Retirement Withdrawal Strategies Are Important
Link 20: ChooseFI: The Retirement Manifesto – Drawdown Strategy Podcast
Link 21: CoachCarson: My Rental Retirement Strategy
Link 22: Accidently Retired: How I Planned my Early Withdrawal Strategy
Link 23: Playtirement: Playtirement Preservation Stage

Find the above links within this link (found at the end of article):
our-retirement-investment-drawdown-strategy