tag:blogger.com,1999:blog-2970975545475697571.post4117628223793477127..comments2024-03-28T16:12:08.205-04:00Comments on Eaton Rapids Joe: Lump Sum or Monthly Pension Checks?Eaton Rapids Joehttp://www.blogger.com/profile/09102166969915526172noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2970975545475697571.post-59884616102001519232014-08-04T18:08:44.396-04:002014-08-04T18:08:44.396-04:00Hello Old NFO
That was not a very well written or...Hello Old NFO<br /><br />That was not a very well written or punctuated posts. The $3.33 per thousand dollars is a <b>per month</b> value. It is the same number everybody uses, 4% a year. I used "per month" because that is how Mrs ERJ and I budget.<br /><br />Another thing that does not get discussed is how frequently that $3.33/$1000 (or 4%) number get recalculated. I had always assumed it was an annual calculation...probably done the same time one rebalanced their asset allocation.<br /><br />A careful re-reading of some of the financial writers implied that it was a one-time calculation. That is, make the calculation and then tell Fidelity, Vanguard or whoever to mail you a check for $x into infinity.<br /><br />If that is the basis for the simulations then extra conservatism must be baked into that 4% number. If one has comfort with the amount varying year-by-year than one can undoubtedly pick a higher percentage....just don't forget to reset the number.<br /><br />One compelling case for the higher percentage and annual recalculations is that many retired people have the health and inclination to work their bucket list down. That takes funds. Then, as they get older and their most urgent desires are fulfilled, they (supposedly) like to stay home and watch the hummingbirds which is less cash intensive. The higher %/Recalc would front load more of the cash withdraw unless the markets over-perform.<br /><br />Like any casino, you walk up to the roulette wheel, make your choices and put your money down. Nobody can guarantee anything except that "the house" is taking a skim.Eaton Rapids Joehttps://www.blogger.com/profile/09102166969915526172noreply@blogger.comtag:blogger.com,1999:blog-2970975545475697571.post-48712413739976139592014-08-04T12:18:51.824-04:002014-08-04T12:18:51.824-04:00Good precis, first time I've heard below 4% on...Good precis, first time I've heard below 4% on the withdrawls though... Before I always heard 4-4.5%...Old NFOhttps://www.blogger.com/profile/16404197287935017147noreply@blogger.com