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Strategies & Market Trends : Retirement - Now what? -- Ignore unavailable to you. Want to Upgrade?

To: Drygulch Dan who wrote (91)	3/30/2005 10:54:04 PM
From: stock bull	Read Replies (1) \| Respond to of 288

The question is, do you have sufficient assets to provide a stream of income to support the assumptions as you described them? Also, you must include the affects of inflation on your retirement income. I assume a 4% annual rate of inflation. So, to offset the affects of inflation, you need to have a growth component in your financial planning. Hope this helps. Stock Bull

To: Drygulch Dan who wrote (91)	3/31/2005 12:42:48 AM
From: B.K.Myers	Read Replies (1) \| Respond to of 288

Drygulch, What I have heard and makes sense to me, is to subtract your age from 100 and invest that percentage of your nest egg in growth investments. The remaining percent (your age) should be invested in fixed income securities. Using your asset classes, the real estate and investments (stocks, but not bonds) would be the growth investments. Applying this formula, you would want about 42% of your nest egg invested in those asset classes. The other 58 percent you would want to have invested in fixed income securities (Savings, CDs, Bonds, etc). Using this method, your $100K of annual expenses would come first from the income generated by your fixed income investments. The remainder would come from either selling some of your growth investments or removing some of the principle from the fixed income securities. You determine where the money comes from by rebalancing your portfolio at the end of each year according to your age. A bond ladder is one good way to allocate your fixed income securities and help protect against inflation. It also makes it easier to rebalance your portfolio every year. Along with inflation, another concern is the value of the dollar. Since so many of the products that we buy come from overseas, a falling dollar will accentuate the rate of inflation. Several years ago I read about an investment strategy that consisted of buying CDs in several different currencies. Obviously if you apply this strategy you assume the risk of the losing some principal if the value of the dollar rises. On the other hand, if you are completely invested in the US dollar you run the risk of that dollar losing purchasing power if it falls in value. I bring this up because it is an investment strategy that I have started to apply to my investments. I just don’t have a lot of confidence in the continued long-term strength of the US dollar. A professional financial can also help you work out a plan that is customized to fit your particular needs. B.K.

To: Drygulch Dan who wrote (91)	4/4/2005 12:45:32 PM
From: OldAIMGuy	Read Replies (2) \| Respond to of 288

Hi DD, Re: asset allocation for retirement..... I found it helpful to start with the annual budget and work backward. Develop the various devices that you'll need to produce the annual income. If that's $100,000 a year, then find income producing assets that will generate that level of income without invading the principle. Let's say you find a govt bond fund yielding 8%, a corp conv. bond fund yielding the same and a REIT fund generating 6%. Let's say you decide on 1/3 each for diversified income production. $66,666 / 0.08 = $833,325 invested in govt and corp bonds $33,333 / 0.06 = $555,550 invested in REIT fund --------------------------- $100,000 income from $1,388,875 invested. What would also be nice is to have enough left over to generate enough growth to compensate for inflation. Anything you have left over can then be invested for that sort of growth. An index fund might be the answer. Or, if there's enough principle, a variety of business sector ETFs. Best regards, Tom

To: Drygulch Dan who wrote (91)	5/8/2005 4:50:03 AM
From: Wharf Rat	Read Replies (1) \| Respond to of 288

I can't conceive of needing 100K/ year. Last year, I made 40K, stuck 10K in an 401K, put another 1.5K in my Roth, took my daughter on a cruise to Hawaii, and still had a bit more in savings at the end of the year than at the beginning. Maybe try cutting back on expenses. Rat PS. I almost forgot, but I bought mice elf a plasma TV at Christmas, too. But I had been saving up for it for a few years. + the full "Lord of the Rings"; how else could I justify the TV?