Author Topic: CNN article on the standard FIRE plan  (Read 1643 times)

Zoot

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CNN article on the standard FIRE plan
« on: September 06, 2017, 09:22:57 AM »
Mods, please move this topic if it's in the inappropriate place.  :)  I was torn about whether to put it in general discussion or here.

http://money.cnn.com/2017/09/06/retirement/retirement-income-plan/index.html

The question from the reader will sound very familiar to this crew:
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"When I retire, I plan to invest half of my nest egg in a Standard & Poor's 500 index fund and the other half in a total bond market index fund and then withdraw 3.5% each year adjusted for inflation. Is this a retirement income plan that will work? --John, New Jersey"

Excerpts from the answer:
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"You've got a good framework for a retirement income plan. But before you actually retire, there are a few simple refinements you ought to consider that might improve it, and help you enjoy a more secure retirement in the bargain."  The refinements include making a realistic post-retirement budget, checking asset allocation (50/50 may not be appropriate, add international).

"But whatever withdrawal rate you decide to go with -- and these days 3% to 4% is probably a decent starting point for most people entering retirement -- you need to be ready to adjust your withdrawals up or down throughout retirement based on market conditions and the balance of your retirement portfolio. So, for example, if a bear market eats up a big chunk of your nest egg's value, you might want to forgo an inflation increase for a couple of years or even dial back your scheduled withdrawals to give your portfolio a chance to rebound and reduce the risk of running through your savings too soon."

I'm kind of regarding this as a mainstream endorsement, if a lukewarm one, of the plan most of us are planning on following, in some flavor variation.

Your thoughts?

somers515

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Re: CNN article on the standard FIRE plan
« Reply #1 on: September 06, 2017, 09:47:29 AM »
I agree with you Zoot.

barbaz

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Re: CNN article on the standard FIRE plan
« Reply #2 on: September 07, 2017, 07:48:34 AM »
"When I retire, I plan to invest half of my nest egg in a Standard & Poor's 500 index fund and the other half in a total bond market index fund
Actually, he should invest it right know.

Quote
I'm kind of regarding this as a mainstream endorsement, if a lukewarm one, of the plan most of us are planning on following, in some flavor variation.

Your thoughts?
Why "lukewarm"? Because it is too conservative?

zolotiyeruki

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Re: CNN article on the standard FIRE plan
« Reply #3 on: September 07, 2017, 03:49:02 PM »
"When I retire, I plan to invest half of my nest egg in a Standard & Poor's 500 index fund and the other half in a total bond market index fund
Actually, he should invest it right know.
Maybe he has a retirement package that includes a sizeable lump-sum payment?  Maybe rolling over a 401k?