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    #31
    Originally posted by corn18 View Post
    I try to minimize the growth in my 401k (traditional IRA) to minimize taxes. My 401k is 100% bonds and grows very little. My Roth IRAs are 100% stocks and my taxable account is 82% stocks. Something to think about.
    I must admit that this is something I haven't paid enough attention to over the years - what was going where. Fortunately, it's not too late to fix it since we're not retired yet and are not drawing from those accounts. I think some repositioning would be beneficial along the lines that you mentioned, keeping more growth in the Roths and less in the 401k and traditional IRAs.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

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      #32
      Originally posted by disneysteve View Post

      I must admit that this is something I haven't paid enough attention to over the years - what was going where. Fortunately, it's not too late to fix it since we're not retired yet and are not drawing from those accounts. I think some repositioning would be beneficial along the lines that you mentioned, keeping more growth in the Roths and less in the 401k and traditional IRAs.
      This is what has often been suggested if you have good bond funds to invest pretax in bonds, risky in roth and everything else taxable to minimize gains.
      LivingAlmostLarge Blog

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        #33
        o
        Originally posted by LivingAlmostLarge View Post

        This is what has often been suggested if you have good bond funds to invest pretax in bonds, risky in roth and everything else taxable to minimize gains.
        Aggregated we're at about an 80/20 portfolio - with our pretax at about 70/30, brokerage at about 85/15, and roths at 100% stock. Brokerage is primarily in index funds to minimize cap gains and dividends.

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          #34
          usually you try to build around a 401k because that has the most limiting options
          LivingAlmostLarge Blog

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            #35
            This resonates with me. My brother and his wife have now both been retired for a few years using the FIRE calcs and their amount for feeling comfortable quitting was not the millions that folks talk about all the time in these forums.... It was somewhere around $750k. That's it. And they're both in their mid-30's so they have a LONG time to live on that money. Now granted, they live fairly frugally so they really only need about $30-40k per year to cover their living expenses (no kids yet, but they are trying and have factored in those costs as well). But I think it's important that people consider the fact that their money continues to grow as they retire when they think about how much they really need. And also, for folks that live in lower COLA areas or just aren't big spenders, it doesn't take nearly as much to live.

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              #36
              Originally posted by breathemusic View Post
              My brother and his wife have now both been retired for a few years using the FIRE calcs and their amount for feeling comfortable quitting was not the millions that folks talk about all the time in these forums.... It was somewhere around $750k.

              they really only need about $30-40k per year to cover their living expenses
              That puts them at a 4-5% withdrawal rate. That might be a tiny bit high but not dramatically. The rule of thumb from the Trinity study is a 4% WR.

              If you can live happily on 30K, that's great, and no you won't need millions.
              Steve

              * Despite the high cost of living, it remains very popular.
              * Why should I pay for my daughter's education when she already knows everything?
              * There are no shortcuts to anywhere worth going.

              Comment


                #37
                Originally posted by breathemusic View Post
                This resonates with me. My brother and his wife have now both been retired for a few years using the FIRE calcs and their amount for feeling comfortable quitting was not the millions that folks talk about all the time in these forums.... It was somewhere around $750k. That's it. And they're both in their mid-30's so they have a LONG time to live on that money. Now granted, they live fairly frugally so they really only need about $30-40k per year to cover their living expenses (no kids yet, but they are trying and have factored in those costs as well). But I think it's important that people consider the fact that their money continues to grow as they retire when they think about how much they really need. And also, for folks that live in lower COLA areas or just aren't big spenders, it doesn't take nearly as much to live.
                I'm not sure $750k in your 30s without kids is a realistic number. But of course they are young enough to go back to work. I would be very hesitant to have kids without employer provided coverage. I think that there is a lot of potential problems especially as older parents to be having kids without a safety net of employer provided insurance.
                LivingAlmostLarge Blog

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                  #38
                  As long as you are living in a bull market, all is well. But keep in mind, the S&P actually lost value in the previous decade, and in fact, it has lost value in 4 out of 9 decades dating back to the 30s. We are living in the longest bull market in modern history. Yes, the markets corrected a year ago, but that was a very brief, secular event in an overall bull market.

                  There is mounting evidence that the bull market for stocks is nearing its end. Key indicators are rising interest rates, inflation, and a bull market emerging for natural resources and commodities, which almost always have an inverse relationship with the stock market.
                  Never underestimate the power of stupid people in large groups.

                  -George Carlin

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                    #39
                    Originally posted by TexasHusker View Post
                    keep in mind, the S&P actually lost value in the previous decade, and in fact, it has lost value in 4 out of 9 decades dating back to the 30s.
                    I know you're not a stock investor, but can you please provide a reference for that claim as it's quite different than any chart I can find.

                    Looking at S&P 500 total returns:
                    1930s: 6 of 10 years negative
                    1940s: 3 of 10
                    1950s: 2 of 10
                    1960s: 3 of 10
                    1970s: 3 of 10
                    1980s: 1 of 10
                    1990s: 1 of 10
                    2000s: 4 of 10
                    2010s: 1 of 10

                    So in the worst decade, the 1930s, the S&P 500 was negative in 6 of 10 years, and the 10-year average annual return was still positive by 5.339%. In each of the other decades, the 10-year average was also positive.
                    Steve

                    * Despite the high cost of living, it remains very popular.
                    * Why should I pay for my daughter's education when she already knows everything?
                    * There are no shortcuts to anywhere worth going.

                    Comment


                      #40
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                      Last edited by TexasHusker; 03-12-2021, 06:46 AM. Reason: Duplicate
                      Never underestimate the power of stupid people in large groups.

                      -George Carlin

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                        #41
                        The point is, your friend is making withdrawals, and still having growth, in a massive stock bull market. That’s not sustainable.
                        Never underestimate the power of stupid people in large groups.

                        -George Carlin

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                          #42
                          Originally posted by TexasHusker View Post
                          The point is, your friend is making withdrawals, and still having growth
                          I don't think that's terribly uncommon. If you keep your withdrawal rate at 3-4%, as recommended, you don't need huge returns to come out ahead. Over a 30-year retirement, averaging 5% or more isn't unreasonable.
                          Steve

                          * Despite the high cost of living, it remains very popular.
                          * Why should I pay for my daughter's education when she already knows everything?
                          * There are no shortcuts to anywhere worth going.

                          Comment


                            #43
                            I have the data. This is for a 100% stock portfolio using real total returns on a 10 year rolling average. Not a lot of negative 10 year periods once you take into account dividends and inflation.

                            Click image for larger version

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                            Last edited by corn18; 03-12-2021, 08:04 AM.

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                              #44
                              Originally posted by TexasHusker View Post
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                              This does not include dividends.

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                                #45
                                Some more data. This is what I use for planning. Lots of data to digest. The is for a 50/50 portfolio. As you can see, I am planning conservatively. Notice there are no negative 30 year periods.

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                                Last edited by corn18; 03-12-2021, 08:05 AM.

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