Author Topic: What has worked/not worked for you guys who have been Fire for 10 yrs +?  (Read 30740 times)

Bracken_Joy

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I swear every time I read a post from Nords, I end up in a google cycle for at least an hour. Thank you Nords!

Do people generally keep the same AA between before and after FIRE? From Syd's post about the 4% rule, she talks about a 50/50 being the most conservative you would ever want to go. I guess you could have a 50/50 even before FIRE, it would just take a lot longer to get there?

Nords

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Damn, Nords, 90% equities, eh?  I'm such a pussy -- I wound down my equity exposure from 90 to 80 to 75 to 60 over the last 8-9 years, and in fact recently went to 55 on the basis of Buffet's "be fearful when others are greedy, and greedy when others are fearful" mantra.  Keep thinking that I want to be somewhere between 60 and 75%, but waiting for a shake out before going all in again (market timing?  I don't know).
Thanks!  But I should mention that I have a military pension anchoring my expenses.  It's the equivalent of the income from a portfolio of I bonds, so I can afford to put the rest of our investment portfolio in equities.  We also keep the two years' expenses in cash to ride out the breathtaking volatility that those equities will experience during a recession. 

William Bernstein's efficient frontier research shows that 80/20 is about the limit of the performance curve.  100/0 does not offer appreciably more return but it's a lot more risk (and volatility). 

Buffett is pretty happy these days.  The last time he was fearful was 1999, and the last time he was greedy was 2009.  Instead of riding his coattails, perhaps it's easier to find the sweet spot in your own asset allocation that lets you sleep at night.  Maybe it's 60/40 or maybe it's more dividend-paying stocks or maybe it's a mutual fund like Vanguard Wellesley that automatically rebalances for you.  That's why Buffett says that most people should invest in index funds instead of trying to time the market.

I've always been torn between the two competing theories of how to treat a pension, i.e., as a portion of one's fixed income allocation, thus allowing one to be more aggressive with invested funds; or as a basis for being a lot more conservative because with the pension (and eventually SS), one doesn't need to be very aggressive with invested funds in order to cover one's financial needs. 
I don't have a good answer to the dilemma of investing assets which you don't need.  It's a stewardship question-- do you bury your extra money in a coffee can in the back yard, or do you fling it around to create even more money? 

We ER'd with a bare-bones 4% SWR budget, and in the last 13 years our net worth has gone up while our expenses have stayed largely flat.  I've responded to that by investing even more aggressively (angel investing in startups) but I've learned enough to know that I'm not going to do it for the rest of my life. 

We've also donated the "excess" to charities but we've felt underwhelmed by our philanthropy.  We haven't figured out that issue, either.  I'd rather invest $10K in a startup that hires six people, does good work for a year or two, and then pivots or flames out.  Our next-best idea is college scholarships, but I'd want a selection board to do the grunt work.

I guess I've tended toward the "what helps you sleep at night" philosophy, but a part of me thinks I'm being too conservative (though my goal of 6% return have been more than met the past 12 years (avg. return 9.67%)) and should just set it at 75/25 and be done with it.
That'll work.

I swear every time I read a post from Nords, I end up in a google cycle for at least an hour. Thank you Nords!

Do people generally keep the same AA between before and after FIRE? From Syd's post about the 4% rule, she talks about a 50/50 being the most conservative you would ever want to go. I guess you could have a 50/50 even before FIRE, it would just take a lot longer to get there?
You're welcome!

That's controversial and the research is still inconclusive.  A Canadian analyst, Jim Otar, has suggested that beginning investors should pile up cash for a couple of years just to avoid getting savaged by a recession.  After they'd built up a cash stash then they could start putting their paychecks toward their asset allocation.

The "human capital" theory of Moshe Milevsky is that you invest according to your career.  If you're a professional football player or a Wall Street financial analyst (high earnings, short career, lots of unemployment) then you'd want to have an asset allocation high in bonds and cash.  If you're a college professor (low earnings, long career, tenure) then you can afford to put your portfolio mostly into equities. 

But you're right, a 50/50 AA before retirement would be a long haul.  While you're working, it makes more sense to have a higher equity asset allocation (up to 80/20 or whatever lets you sleep comfortably at night) because you have a relatively reliable paycheck and an unemployment emergency fund.

A more recent theory by Wade Pfau is that retirees should adopt a more conservative asset allocation just before retirement in order to avoid a sequence-of-returns risk during the first decade of retirement.  If you get through the first 5-10 years without a serious recession then you'd allow your equity asset allocation to have a "rising glide slope" during the rest of retirement.

This may all be very interesting research, but the fundamental issue is avoiding portfolio failure.  The best way to prevent portfolio failure is to annuitize some of your retirement income for longevity insurance.  Maybe that's "just" Social Security, or maybe you buy a single-premium immediate annuity for a bare-bones budget.  (Even if it's not adjusted for inflation, SS will be.)  Then you can be more aggressive with the rest of your portfolio in retirement, knowing that you have an 80% success rate on your 4% SWR while also having covered the 20% failure possibility with the annuity.

I'd say that a 50/50 equities/bonds portfolio is the lowest equity asset allocation you'd want to have in order to keep up with inflation.  My parents-in-law are at 0% equities, 100% CDs & Treasuries and I can affirm that they are losing to inflation. 

Exflyboy

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Damn, Nords, 90% equities, eh?  I'm such a pussy -- I wound down my equity exposure from 90 to 80 to 75 to 60 over the last 8-9 years, and in fact recently went to 55 on the basis of Buffet's "be fearful when others are greedy, and greedy when others are fearful" mantra.  Keep thinking that I want to be somewhere between 60 and 75%, but waiting for a shake out before going all in again (market timing?  I don't know).

I've always been torn between the two competing theories of how to treat a pension, i.e., as a portion of one's fixed income allocation, thus allowing one to be more aggressive with invested funds; or as a basis for being a lot more conservative because with the pension (and eventually SS), one doesn't need to be very aggressive with invested funds in order to cover one's financial needs.  I guess I've tended toward the "what helps you sleep at night" philosophy, but a part of me thinks I'm being too conservative (though my goal of 6% return have been more than met the past 12 years (avg. return 9.67%)) and should just set it at 75/25 and be done with it.

I run at about 85 equities but like Nords (kinda) I have a pension that pays about half our expenses that I can draw next year and our rental business pays close to the other half.. So like Nords I am Anchoured by an income so always felt I could take more risk with the AA.. I currently run about 7.5 in bonds and cash.

dude

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Damn, Nords, 90% equities, eh?  I'm such a pussy -- I wound down my equity exposure from 90 to 80 to 75 to 60 over the last 8-9 years, and in fact recently went to 55 on the basis of Buffet's "be fearful when others are greedy, and greedy when others are fearful" mantra.  Keep thinking that I want to be somewhere between 60 and 75%, but waiting for a shake out before going all in again (market timing?  I don't know).

I've always been torn between the two competing theories of how to treat a pension, i.e., as a portion of one's fixed income allocation, thus allowing one to be more aggressive with invested funds; or as a basis for being a lot more conservative because with the pension (and eventually SS), one doesn't need to be very aggressive with invested funds in order to cover one's financial needs.  I guess I've tended toward the "what helps you sleep at night" philosophy, but a part of me thinks I'm being too conservative (though my goal of 6% return have been more than met the past 12 years (avg. return 9.67%)) and should just set it at 75/25 and be done with it.

I run at about 85 equities but like Nords (kinda) I have a pension that pays about half our expenses that I can draw next year and our rental business pays close to the other half.. So like Nords I am Anchoured by an income so always felt I could take more risk with the AA.. I currently run about 7.5 in bonds and cash.

Yep, that'll be my situation too. I've calculated that in the first 7 years, my pension + supplement will cover around 86% ($69K) of pre-retirement expenses ($80K); after that, about 71% ($57.5K).  So I only need to cover an $11k gap for the first 7 years, and then a $22.5K gap after that, give or take.  With current contribution rate and earning 5% on my money, I expect an $823K nest egg.  That jumps to nearly $900K if I earn 7%.  That being said, my wife will spend another 7 years working, and I plan to cover a portion of her pre-retirement expenses when she retires, up to a 4% draw (from a potential balance of $1.1M by that time). Five years later, I'll hit full retirement age for SS.  I've been pretty confident that a 60/40 blend (the equities being 35% S&P 500, 15% Wilshire 4500, 5% MSCI) would deliver the returns I need (@6%).  But there is the part of me that thinks I need to be more aggressive!

I only recently dropped to 55/45 because I'm pretty certain a correction is coming by next year.  When it does, I plan to bump my allocation back up to at least 60/40, and possibly more if the correction exceeds 10%.  We'll see.  But it is enlightening to hear about FIRE'd folks out there being on the heavier side for equities.

Thanks, Nords and Exflyboy, for the responses!

Maxman

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Hey Nords you say you keep 2 years spending in cash to ride out a recession. How much loss in the Market do you consider a recession 10%, 20% when you start to dip into your cash reserves?
« Last Edit: June 28, 2015, 03:07:33 PM by Maxman »

Nords

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Hey Nords you say to keep 2 years spending in cash to ride out a recession. How much loss in the Market do you consider a recession 10%, 20% when you start to dip into your cash reserves?
It's always been easy to tell when the market's down, especially during 2008-09!  Let's not make this complicated.

If the market's up at the end of the year then we replenish our cash stash for the following year.  "Up" is any number greater than zero.  If the market's down (any number less than zero) then we don't replenish the cash stash.  You can choose whatever "up" and "down" benchmarks you prefer-- the Dow, the S&P500, or your own portfolio.  There's no need to be precise about it.

There's no research or studies to validate this "two years in cash" concept.  We backed into it because I have annuitized income (a military pension) and so we have a high-equity investment portfolio (>90% equities, no bonds).  80% stocks/20% bonds is at the border of Bernstein's "efficient frontier" of risk vs reward, so above 80% equities there's more risk than reward.  But most bear markets last for two years, we have no reason to invest in bonds, and our choice arbitrarily became two years in cash.

If the market was down during the second year then we'd keep spending down our cash until the market came back up.  That only works for two years, since that's the length of most bear markets.  Human behavioral psychology predicts that we'd probably cut back our spending, too, so we might get to 2.5 years.

Another point that's frequently raised is "... but then you have to sell stocks at a loss."  Well, they're off their peak that they reached the previous year, but most of the shares would still be above their cost basis.  You'd be out of cash after two years so you'd sell as much as you needed for another year of spending, and maybe you'd try to offset capital gains with capital-loss harvesting (if you actually had any capital losses to harvest).  But otherwise you'd stick to your asset allocation and take it a year at a time.

Yet another point is "You have tenants in your rental, so you could try to stretch your cash even further."  That'd work great if they stayed in the rental for the length of the recession.  But if real estate got hammered by a recession then they might buy their own place and move out of our rental.  Or they'd lose their job in the recession and... move out of our rental.  If they stayed in the rental, they could ask us to lower their rent.  It's tempting to count on rental cash flow during a recession, but it's probably risky.

Still yet another point is "... but interest rates on cash are so low, and it just sits there until the next recession."  The counterpoint is that you're already >90% equities, so during most years you're more than offsetting the drag of allocating 4% of your portfolio to cash.  But the complicated way to chase yield would be to put the second year of spending in three-year CDs (maturing every 6-12 months) and hope that you only have to break into a CD once in a while.  When a reader asked about that, I wrote a detailed post:
http://the-military-guide.com/2014/02/20/how-should-i-invest-during-retirement/

If I was really over-nuking it then I'd even be tempted to sell covered calls 3-9 months before I needed to sell the shares.  You'd get a few hundred bucks for a premium on agreeing to sell shares that you were going to sell anyway.  But I think that reeeeeally complicates the "two years of expenses in cash" concept.

Those are all the ways I know of to make it harder.  But you don't have to do any of them beyond keeping two years' expenses in cash.

patrickza

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JL collins meets your criteria. Actually he currently draws 5% and has done so for many years. He has no other income producing assets besides stocks: http://jlcollinsnh.com/2012/12/07/stocks-part-xiii-withdrawal-rates-how-much-can-i-spend-anyway/

Basenji

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I think Spartana, Old Pro, and RetiredAt63 have several years under their belt. I am sure there are others.
Not to forget Nords, who has been retired at least a decade.
Both Nords and his spouse were career military officers and so have dual pensions - that probably goes a long way to help secure their FIRE and alleviating any future risk fears of REing so maybe not applicable to the OP's questions. Of course most people with military pension don't seem to be able to manage to retire despite that so Nords has a lot of wisdom to offer on how he made that happen when many can't.
Thanks-- 13 years this month! 

Over the last 13 years, though, we kept doing the things that helped us reach FI in the first place. 

But we also did things that any Mustachian can do.  We didn't waste money, and we only spent it on the things that we valued.  (Even if they're my parents-in-law.)  We refinanced our mortgage multiple times (down to 3.625%) and we stayed aggressively invested in over 90% equities. 

In my case, my military pension is one of the world's most trustworthy inflation-indexed annuities.  Because of that, I'm comfortable carrying a fixed-rate 30-year mortgage in retirement.  I'm also comfortable taking larger risks with the rest of our investments, which are >90% equities (index funds and Berkshire Hathaway).  To ride out the higher volatility of a high-equity portfolio, we keep about 8%-10% of it in cash (CDs and money market).  That's two years of spending, and most recessions are shorter than that.  If the market has a good year then we replenish the cash stash.  If the market has a bad year then we start cashing in CDs.


Damn, I think I just wrote another blog post.

My mind just got blown and I need to look at this more, i.e., considering the military retirement as a bond annuity in one's AA. Posting to make sure I can find this later.
« Last Edit: July 21, 2015, 04:28:54 PM by Basenji »

Nords

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My mind just got blown and I need to look at this more, i.e., considering the military retirement as a bond annuity in one's AA. Posting to make sure I can find this later.
What's also mind-blowing is the amount of money you'd have to put into your account to fund a COLA'd annuity.  DoD brokered a 1980s deal with the U.S. Treasury for special-purpose govt bonds, and it's horrifically expensive to fund the actuarial liability.  I think each dollar of a military pension is even more expensive than a dollar of Social Security benefits because the SSA can move tax receipts directly through to the recipients, while military retirees tend to collect a lot more pension payments than SS beneficiaries collect SS payments.

This explains why DoD is so passionate about military retirement reform-- if they can fund more military retirements through our TSP accounts (and less through defined benefits pensions) then they'll save a huge sum of actuarial liabilities.

On a personal level you could look at a military pension as a COLA'd annuity, or a portfolio of I bonds, or (perhaps) a TIPS fund.  They're all imperfect analogies because the govt should not have a default risk (or a profit motive), and TIPS/I bonds eventually mature.  However they're reasonably accurate estimates.  Here's some more details:
http://the-military-guide.com/2011/03/21/asset-allocation-considerations-for-a-military-pension/
http://the-military-guide.com/2011/03/23/asset-allocation-considerations-for-a-military-pension-part-2/
http://the-military-guide.com/2011/03/24/asset-allocation-considerations-for-a-military-pension-part-3-of-3/

Basenji

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My mind just got blown and I need to look at this more, i.e., considering the military retirement as a bond annuity in one's AA. Posting to make sure I can find this later.
What's also mind-blowing is the amount of money you'd have to put into your account to fund a COLA'd annuity.  DoD brokered a 1980s deal with the U.S. Treasury for special-purpose govt bonds, and it's horrifically expensive to fund the actuarial liability.  I think each dollar of a military pension is even more expensive than a dollar of Social Security benefits because the SSA can move tax receipts directly through to the recipients, while military retirees tend to collect a lot more pension payments than SS beneficiaries collect SS payments.

This explains why DoD is so passionate about military retirement reform-- if they can fund more military retirements through our TSP accounts (and less through defined benefits pensions) then they'll save a huge sum of actuarial liabilities.

On a personal level you could look at a military pension as a COLA'd annuity, or a portfolio of I bonds, or (perhaps) a TIPS fund.  They're all imperfect analogies because the govt should not have a default risk (or a profit motive), and TIPS/I bonds eventually mature.  However they're reasonably accurate estimates.  Here's some more details:
http://the-military-guide.com/2011/03/21/asset-allocation-considerations-for-a-military-pension/
http://the-military-guide.com/2011/03/23/asset-allocation-considerations-for-a-military-pension-part-2/
http://the-military-guide.com/2011/03/24/asset-allocation-considerations-for-a-military-pension-part-3-of-3/
Thanks Nords. I'm trying to get serious in my reading/learning. I just read that series of Military Guide posts and when DH came home he was quite bemused when I excitedly told him how over conservative our portfolio is. Anyhoo, working on a big question that combines a military retirement and super low mortgage rate and how then to AA and be able to rebalance. It seems that I thought we were being too risky and now I'm groking that we're way way way too conservative.

Nords

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Thanks Nords. I'm trying to get serious in my reading/learning. I just read that series of Military Guide posts and when DH came home he was quite bemused when I excitedly told him how over conservative our portfolio is. Anyhoo, working on a big question that combines a military retirement and super low mortgage rate and how then to AA and be able to rebalance. It seems that I thought we were being too risky and now I'm groking that we're way way way too conservative.
I hear that.

If you're planning to keep a mortgage during military retirement, then I'd go for a 30-year fixed-rate loan and put the rest of your portfolio in ~90% equities and no bonds.  In order to ride out the volatility of a two-year bear market, the remaining ~10% of your portfolio could be in cash or CDs.  The idea of "no bonds" is to hold assets likely to return more than the mortgage interest rate.

Of course if the mortgage rate is really really low then you might be able to find bonds with a yield in excess of the mortgage rate.  However if you have a military pension then your asset allocation can be much more aggressive, and the 10% cash allows you to sidestep most of a market's downward volatility. 

brooklynguy

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The idea of "no bonds" is to hold assets likely to return more than the mortgage interest rate.

Of course, the same rationale explains why going 100% stocks (and zero cash) with the balance of the portfolio makes even more sense and should be even more optimal, but that approach admittedly does require steel cojones to stay the course during down markets and avoid self-sabotaging your own plan in a fit of panic.

Basenji

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Thanks Nords. I'm trying to get serious in my reading/learning. I just read that series of Military Guide posts and when DH came home he was quite bemused when I excitedly told him how over conservative our portfolio is. Anyhoo, working on a big question that combines a military retirement and super low mortgage rate and how then to AA and be able to rebalance. It seems that I thought we were being too risky and now I'm groking that we're way way way too conservative.
I hear that.

If you're planning to keep a mortgage during military retirement, then I'd go for a 30-year fixed-rate loan and put the rest of your portfolio in ~90% equities and no bonds.  In order to ride out the volatility of a two-year bear market, the remaining ~10% of your portfolio could be in cash or CDs.  The idea of "no bonds" is to hold assets likely to return more than the mortgage interest rate.

Of course if the mortgage rate is really really low then you might be able to find bonds with a yield in excess of the mortgage rate.  However if you have a military pension then your asset allocation can be much more aggressive, and the 10% cash allows you to sidestep most of a market's downward volatility.

Yep, totally getting the concept. It's just so radical to me to think about going 90%, but it makes sense, freaks me out, makes sense... We're exactly in the situation you describe, 2.875% 30-year fixed (NFCU I love you) mortgage just refi in the last 2 years, and mil retirement.

Were you adding the bit about bonds to soothe a skittish newbie or do you think bonds that yield more than the mortgage rate could be useful for rebalancing purposes? Or is the idea to diversify within equities (REITS, US index, international---for example only) and just ride out declines on the money market 8-10%?

How I feel right now trying to digest this info:
...Imagine all life as you know it stopping instantaneously and every molecule in your body exploding at the speed of light.
« Last Edit: July 21, 2015, 08:16:49 PM by Basenji »

Basenji

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The idea of "no bonds" is to hold assets likely to return more than the mortgage interest rate.

Of course, the same rationale explains why going 100% stocks (and zero cash) with the balance of the portfolio makes even more sense and should be even more optimal, but that approach admittedly does require steel cojones to stay the course during down markets and avoid self-sabotaging your own plan in a fit of panic.

Hey, you're the other guy that blew my mind today when I read your comment in the pay down/don't pay down the mortgage thread (albeit on page 8 back in March) that same point, that a very low 30-year mortgage logically implied zero bonds. I started hyperventilating when I read that.
« Last Edit: July 21, 2015, 08:16:01 PM by Basenji »

G-dog

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@Basenji - Ghostbusters ref! Right on!

Not sure if I will go see the remake coming out soon, I feel I will inevitably be disappointed.

Back to the topic - i (still) have a pension (though I have not started drawing it), which based on Nords' comment in this thread made me realize I could view that as a bond/annuity! I am already at >90% equities (just left accumulation phase as of 18 days ago) since right now bonds suck and I was trying to grow aggressively so I could leave. Thinking of my pension as part of my AA helped me feel I was at a little lower risk. The value is still an unknown since the company could change the rules...

Nords

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Were you adding the bit about bonds to soothe a skittish newbie...
Yes.

Mathematically the pension is a huge bond-income asset.  It makes no sense to hold any other bonds because you have plenty of annuitized income, and the volatility of the equity portion of the portfolio is just a statistical blip by comparison. 

... or do you think bonds that yield more than the mortgage rate could be useful for rebalancing purposes?
No.  That's just the most popular asset class for reducing volatility.  Bonds have a long historical record and they're relatively straightforward to simulate with computer programs.

Emotionally, people dislike volatility and take comfort from bonds (and bond income).  But holding 8%-10% cash lets you ride out at least two years of a bear market, so you don't need to care about most downward volatility.  As far as I can tell, nobody complains about upward volatility.

When you have a portfolio that's 8%-10% cash, and you replenish it at the end of the year, it's the same as rebalancing. 

Or is the idea to diversify within equities (REITS, US index, international---for example only) and just ride out declines on the money market 8-10%?
Yep.  Or just buy an equity index fund and then spend more time surfing.

Again, you have a large monthly income from a COLA'd annuity.  There's no need to overcomplicate the rest of your investment portfolio.

Here's an example.  Every month in 2015 my military O-4 Final Pay pension pays me $3566.  If we assume that TIPS are the equivalent of a COLA'd pension, the last 30-year TIPS auction had an annualized high yield of 1.142%.  To earn $3566 every month from that portfolio, I'd have to buy 3566 x 12 / 0.01142 = $3.75M of TIPS.  If you had an investment portfolio of $1M in equities, you'd already be 79% bonds and 21% equities.  If that investment portfolio was cut in half by the Great Recession then you'd be 88% bonds and 12% equities.  "Losing half of $1M" and "losing 50% on your equities":  those are some pretty freakin' emotionally scary numbers.  But adjusting your asset allocation from 79% bonds to 88% bonds?  Not so scary.

Now imagine that you split that equity portfolio (12% or 21%) among all of those stock asset classes.  If any of them doubled in value or lost half of their value, they'd barely move the needle on your overall equivalent asset allocation.  Mathematically, holding any less than 10% of an asset class in a portfolio is not going to significantly skew the portfolio with a year or two of growth (or losses).  But allocating 3.6% of a portfolio to something makes people feel in control of their portfolio and their emotions.

Behavioral psychology (and "sleep at night" comfort) is just as important as Vulcan logic.  Maybe it's more important because it certainly gets in the way of logic more often.

Basenji

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Thank you, deeply madly, thank you. Great thread, rereading the whole thing once more.

LiseE

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great thread .. thank you!

tooqk4u22

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Again, you have a large monthly income from a COLA'd annuity.  There's no need to overcomplicate the rest of your investment portfolio.

Here's an example.  Every month in 2015 my military O-4 Final Pay pension pays me $3566.  If we assume that TIPS are the equivalent of a COLA'd pension, the last 30-year TIPS auction had an annualized high yield of 1.142%.  To earn $3566 every month from that portfolio, I'd have to buy 3566 x 12 / 0.01142 = $3.75M of TIPS.   If you had an investment portfolio of $1M in equities, you'd already be 79% bonds and 21% equities.  If that investment portfolio was cut in half by the Great Recession then you'd be 88% bonds and 12% equities.  "Losing half of $1M" and "losing 50% on your equities":  those are some pretty freakin' emotionally scary numbers.  But adjusting your asset allocation from 79% bonds to 88% bonds?  Not so scary.

Your comparison to TIPS is pretty accurate given the comparable gov't risk, inflation protected, and duration. However, the absolute dollar does not compare as you calculated because in the bond scenario at the end of 30 years you would still have the bond value (+/-adjustments for inflation/deflation) so in your example you would collect the 1.14% but still have $3.75M in real terms at the end of 30 years.  Whereas with your pension it is more of wasting asset as ends when you end - you can't live forever and there is a statistical age when it will happen - so mortgage style is more appropriate comparison, just need to pick a time frame. 

Based on a $3566 monthly payment, a 1.142% annual rate, and 30 years it would require a original investment balance of $1,086,520 so not nearly as significant of a number......with pensions you win the longer you live and lose the longer you don't that's where the actuary stuff comes into play for the whole pot of pensioners.  Because your pension goes for life (hopefully long) and given that one's end of life moment can't be perfectly predicted I would say that the person relying on a TIPS portfolio would be wise to have a safety margin (i.e. greater investment) to protect against the event of living longe than 30 years to be more comparable on a risk basis.


Cassie

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Another good thing about some pensions is that you can leave them to a spouse upon death which makes them last even longer & pay out more.