Another excellent video Eric! This obviously took time and a lot of effort to dig out the data and create the presentation and I'm quite certain everyone will appreciate that very much. There is a lot of data here and it is gong to take me a couple more run throughs to completely digest it all. Thanks for all your efforts to better education those of us in need 🙂. Larry, Certral Valley, Ca.
Thanks Eric for creating Part 2 - it was a wonderful follow-up to Part 1. I think there are many retirees and soon-to-be's that are benefitting hugely from your videos. Someone else posted this comment, if i can add to it: would love to see more info on the time segmentation method and which investment types are best suited for each; such as t-bills and ladders, CDs and ladders, etc. Also, i got the impression (perhaps I misunderstood) that the 60/40 prorata approach was superior in performance technically however was challenging for many to implement especially when there is a down stock market for multiple successive years. No worries, I can watch Part 1 again. Thank you again Eric, this is great stuff you are sharing - Please keep up the awesome work 😊
I plan to re-watch these two videos, because there is a lot to digest in them. I’m a little confused, however. These don’t all seem to be distribution strategies. They seem to be asset management strategies for the portfolio after annual distributions are made. Given a fixed withdrawal rate, doesn’t that “stack the deck” for time segmentation and safety first? Both of these methods seem like they would be the best at managing sequence of returns risk. And the safety first strategy makes a different distribution decision than the rest, taking portfolio assets “off the table” to contractually guarantee income. You alluded to this at the end, but it seems like this video sets the stage for a final video that examines portfolio management strategies along with the primary distribution options that might be chosen. Like fixed withdrawals vs a “spending smile” distribution option vs a total return “guardrails” flexible spending approach. It seems like this video is less about distribution strategies and more about portfolio management decisions. Did I miss something?
Great video. Good point at the end on understanding the limitations of Monte Carlo as ups and downs in the market aren't purely random. I did bucket method vs. Pro rata with rolling 30 years periods of real returns and was surprised at how well the classic 60/40 did vs. any combination of bucket periods I chose. I have abandoned the bucket strategy as a reasonable choice since that. Glad your data backs it up too.
Great video, Eric. I’m especially intrigued by your comments around 11:45 in the video about a subtle but significant “shortcoming” of the Monte Carlo software - specifically, that market performance in each “year” is independent from the previous year, whereas historically a year of poor equity returns is often followed by a year of better equity performance. You mentioned that such a shortcoming may serve to “shortchange” (my words not yours) the performance of the pro rata approach. My financial advisor came up against this same issue when trying to simulate poor equity performance the first 2 years of my retirement. I imagine this issue would also serve to affect the bucket strategy as well in Monte Carlo simulations.
Given the bucket strategy is one of the most popular, have you fixed the bug? We would still like to see that scenario since the chart you showed was ending balances, but that could be due to the statistical time sequence?
I would love to see the 4% plan where one takes out 4 on whatever the balance is. Not 4% that stays the same plus an inflation bump each year no matter the balance. Your yearly income will vary but should increase over time.
Thanks for all the videos. Too bad for me I wasn't watching these 5 years ago! Would have done things differently. But, no use crying over spilled milk! I just finished your video on efficient tax withdrawal strategies. And I have a question. I need to reduce my Traditional IRA by about $200K. My plan for 2024 is to use QCD's to offset more than half my RMD. This will be my first RMD. Then I will fill in the 12% bracket with converting into my Roth. It looks like my conversion would be around $45K. I would do the same process for the next 2 years. However, with an increase in standard deduction and the top of the 12% bracket I should be able to increase the conversion by several thousands. So, I hope to see reduction my RMD to about $30K or lower in 2026. Does this sound feasible? I'm also, taking other steps to reduce ordinary income, capital gains, and tax investing location.
While I'm sure it was done for illustrative reasons, pulling 75K on on a 1M next egg sounds very, very scary to me, even if for a few years. It would take a lot of persuasion for me to sleep at night.
I reccomend you listen to an Nvidia conference call. You mispronounced the name... which makes you sound not well informed. It should sound closer to "en-vid-dee-yah" or just say the letter "N" then say "vidia".
Another excellent video Eric! This obviously took time and a lot of effort to dig out the data and create the presentation and I'm quite certain everyone will appreciate that very much. There is a lot of data here and it is gong to take me a couple more run throughs to completely digest it all. Thanks for all your efforts to better education those of us in need 🙂. Larry, Certral Valley, Ca.
Thanks Eric for creating Part 2 - it was a wonderful follow-up to Part 1. I think there are many retirees and soon-to-be's that are benefitting hugely from your videos. Someone else posted this comment, if i can add to it: would love to see more info on the time segmentation method and which investment types are best suited for each; such as t-bills and ladders, CDs and ladders, etc. Also, i got the impression (perhaps I misunderstood) that the 60/40 prorata approach was superior in performance technically however was challenging for many to implement especially when there is a down stock market for multiple successive years. No worries, I can watch Part 1 again. Thank you again Eric, this is great stuff you are sharing - Please keep up the awesome work 😊
Great video. Thanks!
I would love to see a deep dive into time segmentation. There is very little information on it out there.
More money=better plan😊
Great video! Do you have any videos that go through the pros and cons of different types of annuities? Would love to see that content. Thank you!
I plan to re-watch these two videos, because there is a lot to digest in them. I’m a little confused, however. These don’t all seem to be distribution strategies. They seem to be asset management strategies for the portfolio after annual distributions are made. Given a fixed withdrawal rate, doesn’t that “stack the deck” for time segmentation and safety first? Both of these methods seem like they would be the best at managing sequence of returns risk. And the safety first strategy makes a different distribution decision than the rest, taking portfolio assets “off the table” to contractually guarantee income. You alluded to this at the end, but it seems like this video sets the stage for a final video that examines portfolio management strategies along with the primary distribution options that might be chosen. Like fixed withdrawals vs a “spending smile” distribution option vs a total return “guardrails” flexible spending approach. It seems like this video is less about distribution strategies and more about portfolio management decisions. Did I miss something?
throw in the peace of mind that the safety first brings and that really adds value to bridge some of the raw results.
Great video. Where can I learn more about Time Segmentation?
Great video. Good point at the end on understanding the limitations of Monte Carlo as ups and downs in the market aren't purely random. I did bucket method vs. Pro rata with rolling 30 years periods of real returns and was surprised at how well the classic 60/40 did vs. any combination of bucket periods I chose. I have abandoned the bucket strategy as a reasonable choice since that. Glad your data backs it up too.
Great video, Eric. I’m especially intrigued by your comments around 11:45 in the video about a subtle but significant “shortcoming” of the Monte Carlo software - specifically, that market performance in each “year” is independent from the previous year, whereas historically a year of poor equity returns is often followed by a year of better equity performance. You mentioned that such a shortcoming may serve to “shortchange” (my words not yours) the performance of the pro rata approach. My financial advisor came up against this same issue when trying to simulate poor equity performance the first 2 years of my retirement. I imagine this issue would also serve to affect the bucket strategy as well in Monte Carlo simulations.
Given the bucket strategy is one of the most popular, have you fixed the bug? We would still like to see that scenario since the chart you showed was ending balances, but that could be due to the statistical time sequence?
Oh, now he's wearing a hoodie. Doesn't want to show off the guns 💪
I would love to see the 4% plan where one takes out 4 on whatever the balance is. Not 4% that stays the same plus an inflation bump each year no matter the balance. Your yearly income will vary but should increase over time.
Thanks for all the videos. Too bad for me I wasn't watching these 5 years ago! Would have done things differently. But, no use crying over spilled milk!
I just finished your video on efficient tax withdrawal strategies. And I have a question.
I need to reduce my Traditional IRA by about $200K. My plan for 2024 is to use QCD's to offset more than half my RMD. This will be my first RMD. Then I will fill in the 12% bracket with converting into my Roth. It looks like my conversion would be around $45K. I would do the same process for the next 2 years. However, with an increase in standard deduction and the top of the 12% bracket I should be able to increase the conversion by several thousands. So, I hope to see reduction my RMD to about $30K or lower in 2026. Does this sound feasible?
I'm also, taking other steps to reduce ordinary income, capital gains, and tax investing location.
While I'm sure it was done for illustrative reasons, pulling 75K on on a 1M next egg sounds very, very scary to me, even if for a few years. It would take a lot of persuasion for me to sleep at night.
Its $75k including social security. So 75-36 from ss gives the portfolio distribution of 4%.
I understand that but he almost always models pulling SS at 70 so 7 years without SS@@michaeleldridge5640
I have a plan that requires more money 😂😊
Go Bears 🐻
I reccomend you listen to an Nvidia conference call. You mispronounced the name... which makes you sound not well informed. It should sound closer to "en-vid-dee-yah" or just say the letter "N" then say "vidia".
How about you give me your money so you can create a better plan
You sound so salty. Is everything okay?