Sounds good to me--since 2000 the "market" has halved twice--gone down by a third once (covid), 25% once and plus or minus 20% three times I believe. Working with a group of adult "students" I did a hypothetical withdrawal using the 4% + 3% rule 12-months ago A blue-chip value fund we have in this house and invested in for decades and still do, was a $300,000 "income stream". Same for the S&P 500 Index. From 2000 to a year ago late March total withdrawal was close to $445,000 and value was a smidge less than $744,000. Index ran out of money for same period. Heavy up on bonds and you might have a big issue if you don't want to destroy your purchasing power. Three decades of retirement and a heavy exposure to bonds is like committing financial suicide--good luck to you. Every year everything I buy costs more. 7 most important words of a retiree. Marty Zweig--"those of you with a crystal ball will end up eating crushed glass." Nobody can predict the market so don't even try. So for folks trying to "time" this market best of luck. How well did it work in the numerous volatile markets from 2000-2025?
From Standard & Poor--1954-2024 -5%---about 2 times yearly--average length 46 days--last occurred July 2024 -10%--about once every 18 months--length 135 days-- last time July 2023 -15%-- about once every 3 years--length 256 days-- last time August 2022 -20%--once every 6 years--length averaged 402 days--last time Jan. '22 Warren Buffett: "The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people."
1980--GOLD--$850 per ounce 2026-- GOLD--$5,000 per ounce 1980---$ 800 invested in S & P 500-- recent value $150,000 I believe gold hit a high of about $850 in 1980. I suspect gold has not been an inflation hedge but more like a security blanket in a volatile world.
If higher rates help keep inflation in check why didn't higher rates do the job in the period 1969-1981--CPI was 6.20%-- in '69--12.34% in 1974----13.29% in '79--12.52% for 1980, and we see 8.92% in 1981. Remember interest rates on money market funds back in those inflation days, but of course after taxes and inflation you were still negative. I think some funds were paying between 10% and 12%. Remember mortgage rates back in the day? Where's the correlation between high interest rates and controlling inflation? Heck we had almost no inflation during the "great recession", and folks were worried about deflation with super low rates. We all ran to refinance not that many years ago. Inflation is too much money chasing too few goods--high prices are a symptom just like a high fever is a symptom of a sickness. If you jack up the money supply (M2?) maybe we get inflation. Remember the 7 most important words of a retiree; every year everything I buy costs more. If you think bonds are an answer you might be in trouble. I think history shows dividends in cash crush bond cash dividends. You pay a price with brown underwear years and volatility, but equities for income are tough to beat. Bonds might be a good cushion in bad markets (2022?), but to stay ahead of inflation I'd like to see some 20-30-year (living in retirement) evidence.
One must remember the 7 most important words of a retiree: "every year everything I buy costs more". So the enemy really is inflation. Since 1934 the Labor Dept. tells us CPI has averaged 3.4% annually. So when I follow the simple rule of 4% +3% we know why 3% was chosen. Now from 1973-1981 we had lots of inflation and it easily exceeded 3% annually. We also know that in 1962 (one born then can retire now at reduced SS) the S&P closed at 63 and 2024 at 4,770 or a factor of 76X. Dividends from the index in cash $2.15 and 2024 it was $70.30, or a factor of 33X. CPI at the end of '62 was 30---recently 307--a factor of 10 X If equities are not a major % of your retirement portfolio then good luck trying to keep up with inflation. Of course the brown underwear years of 2000 (-9/1%)---2001 (-11.9%)---- 2008 (-37%)---covid collapse (-33%)---and 2022 (-18.1%) can ruin many a retiree. As previously stated my value fund (90%-95% equities) with an emphasis on dividends worked nicely beginning in year 2000 with $300,000 and withdrawing 4% + 3% every year through 3/31/25. Withdrew almost $444,000 and as of March 31 the value exceeded $740,000. Remember, the 4 bear markets above during this 25-year period. The index ran out of $ many months ago--beginning with two bad years and then 2007, 2008, early 2009 withdrawals hurt badly. Now the money is managed by the Capital Group--I paid nothing decades ago to invest because of portfolio size--and I know someone has their nose in the air because the expense ratio is north of 55 basis points. That's fine--same scenario with S&P 500 index shows me with close to 3/4 of a million dollars while anyone with the index has no money and little or no cost. Remember the old saying; there are people who know the cost of everything and the value of nothing. What if I took cash dividends? $311,000+through 3/31/25 and a value north of $1.2 million. Index? $192,000 and $1.1 million ending value. Now, it's obvious that one can pick from Vanguard, Dodge & Cox, Fidelity, and many other fine fund families who have managed funds that in the withdrawal mode can do what folks want--many will do better than I have and have done better. Remember, my fund is basically 100% invested in equities--a few bonds and cash for withdrawal purposes no doubt. I think I have, with my investments, beaten back the enemy which is inflation. Let's see what happens going forward. Herbert Stein: " everything works until it doesn't."
thanks--but my question is simple--how does indexing work on the withdrawal phase--I used he S&P 500 which in 2000 was by far the index of choice--how would the total market index have done-- it seems to me that everyone knows the accumulation situation but what about phase 2 for most folks? When you have numerous bear markets beginning in 2000 and you could easily live another 25-years how did whatever index you use do? do folks use index funds as part of their withdrawal portfolio?
thanks--I think the question is how well, whatever indexes used, did they (it) perform from 2000 to 2024 or 03/31/25 during withdrawal--all I hear about is accumulation. For a decade or more all the action has been in U.S. markets so an international index of equities most like trailed somewhat significantly until maybe this year. At some time one usually begins withdrawing and if so is the equity portion indexed and if so what were the results in a 25-year period (2000-2024) that had a number of major bear markets. If one decides to have a 60/40 portfolio are the equity vehicles indexes such as those used during accumulation?
yes, large cap value--yes, different time different results--but for many of us retired folks the year 2000 is, in my opinion, ideal, as is any period where you have major bear markets that make withdrawals very tricky--I want to see results for time periods that encompass the worst not the best. We are constantly told about beginning withdrawals in a down market cycle--well, this 25-year period is just that and is what constitutes a retirement period for maybe at least one spouse. So far I see in my readings here and other places accumulation is always the go to when index is discussed--when I watch NBA finals I see a game played on both sides of the court. In my humble opinion when setting up withdrawals from equity funds, volatility plays a major role. Ed Marsh below echoes my thoughts about spare time and complicated. In this house it has been very simple--4+3 and leave it alone. No green eye shades, no hours picking one index over another, no buckets --no nothing, don't even think about it. Now we have been investing for over 55-years using a few good funds and leaving things alone--adding monthly for those 55-years up to today. Buffett has the right idea when it comes to nervous energy and he is big on indexing to gain wealth--but what about withdrawal? Blue chip stocks--managed fund asset (in my case)--an emphasis on dividends which sure helps to moderate volatility. Works for me.
Ran a hypothetical using a value fund we have had for decades and a 4% + 3% annual withdrawal. Compared to S&P 500 Index--began with $300,000 in year 2000 through 2025--we had numerous bear markets like the one in 2000 and who can forget 2008 as well as covid crushing us with a 33% decline followed by 2024 when stocks and bonds struggled. As of 03/31/2025 withdrawal was almost $444,000 from our fund, while the amount from the index was $431,000+ as it ran out of $ in January of 2024. Our fund at end of 1st quarter this year had a value of almost $744,000. How many people use the index as the equity portion of their withdrawal portfolio? I always hear it described as a wealth builder but to me that is half the game.
Comments
Sounds good to me--since 2000 the "market" has halved twice--gone down by a third once (covid), 25% once and plus or minus 20% three times I believe. Working with a group of adult "students" I did a hypothetical withdrawal using the 4% + 3% rule 12-months ago A blue-chip value fund we have in this house and invested in for decades and still do, was a $300,000 "income stream". Same for the S&P 500 Index. From 2000 to a year ago late March total withdrawal was close to $445,000 and value was a smidge less than $744,000. Index ran out of money for same period. Heavy up on bonds and you might have a big issue if you don't want to destroy your purchasing power. Three decades of retirement and a heavy exposure to bonds is like committing financial suicide--good luck to you. Every year everything I buy costs more. 7 most important words of a retiree. Marty Zweig--"those of you with a crystal ball will end up eating crushed glass." Nobody can predict the market so don't even try. So for folks trying to "time" this market best of luck. How well did it work in the numerous volatile markets from 2000-2025?
Post: Any concern?
Link to comment from March 28, 2026
From Standard & Poor--1954-2024 -5%---about 2 times yearly--average length 46 days--last occurred July 2024 -10%--about once every 18 months--length 135 days-- last time July 2023 -15%-- about once every 3 years--length 256 days-- last time August 2022 -20%--once every 6 years--length averaged 402 days--last time Jan. '22 Warren Buffett: "The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people."
Post: Any concern?
Link to comment from March 28, 2026
1980--GOLD--$850 per ounce 2026-- GOLD--$5,000 per ounce 1980---$ 800 invested in S & P 500-- recent value $150,000 I believe gold hit a high of about $850 in 1980. I suspect gold has not been an inflation hedge but more like a security blanket in a volatile world.
Post: The Playground Indicator
Link to comment from January 31, 2026
If higher rates help keep inflation in check why didn't higher rates do the job in the period 1969-1981--CPI was 6.20%-- in '69--12.34% in 1974----13.29% in '79--12.52% for 1980, and we see 8.92% in 1981. Remember interest rates on money market funds back in those inflation days, but of course after taxes and inflation you were still negative. I think some funds were paying between 10% and 12%. Remember mortgage rates back in the day? Where's the correlation between high interest rates and controlling inflation? Heck we had almost no inflation during the "great recession", and folks were worried about deflation with super low rates. We all ran to refinance not that many years ago. Inflation is too much money chasing too few goods--high prices are a symptom just like a high fever is a symptom of a sickness. If you jack up the money supply (M2?) maybe we get inflation. Remember the 7 most important words of a retiree; every year everything I buy costs more. If you think bonds are an answer you might be in trouble. I think history shows dividends in cash crush bond cash dividends. You pay a price with brown underwear years and volatility, but equities for income are tough to beat. Bonds might be a good cushion in bad markets (2022?), but to stay ahead of inflation I'd like to see some 20-30-year (living in retirement) evidence.
Post: Interest Rates Battle
Link to comment from December 19, 2025
One must remember the 7 most important words of a retiree: "every year everything I buy costs more". So the enemy really is inflation. Since 1934 the Labor Dept. tells us CPI has averaged 3.4% annually. So when I follow the simple rule of 4% +3% we know why 3% was chosen. Now from 1973-1981 we had lots of inflation and it easily exceeded 3% annually. We also know that in 1962 (one born then can retire now at reduced SS) the S&P closed at 63 and 2024 at 4,770 or a factor of 76X. Dividends from the index in cash $2.15 and 2024 it was $70.30, or a factor of 33X. CPI at the end of '62 was 30---recently 307--a factor of 10 X If equities are not a major % of your retirement portfolio then good luck trying to keep up with inflation. Of course the brown underwear years of 2000 (-9/1%)---2001 (-11.9%)---- 2008 (-37%)---covid collapse (-33%)---and 2022 (-18.1%) can ruin many a retiree. As previously stated my value fund (90%-95% equities) with an emphasis on dividends worked nicely beginning in year 2000 with $300,000 and withdrawing 4% + 3% every year through 3/31/25. Withdrew almost $444,000 and as of March 31 the value exceeded $740,000. Remember, the 4 bear markets above during this 25-year period. The index ran out of $ many months ago--beginning with two bad years and then 2007, 2008, early 2009 withdrawals hurt badly. Now the money is managed by the Capital Group--I paid nothing decades ago to invest because of portfolio size--and I know someone has their nose in the air because the expense ratio is north of 55 basis points. That's fine--same scenario with S&P 500 index shows me with close to 3/4 of a million dollars while anyone with the index has no money and little or no cost. Remember the old saying; there are people who know the cost of everything and the value of nothing. What if I took cash dividends? $311,000+through 3/31/25 and a value north of $1.2 million. Index? $192,000 and $1.1 million ending value. Now, it's obvious that one can pick from Vanguard, Dodge & Cox, Fidelity, and many other fine fund families who have managed funds that in the withdrawal mode can do what folks want--many will do better than I have and have done better. Remember, my fund is basically 100% invested in equities--a few bonds and cash for withdrawal purposes no doubt. I think I have, with my investments, beaten back the enemy which is inflation. Let's see what happens going forward. Herbert Stein: " everything works until it doesn't."
Post: How are you dealing with or plan to deal with inflation in retirement?
Link to comment from June 20, 2025
sounds good--was there a withdrawal program and if so how well did it work?
Post: If I Didn’t Index
Link to comment from June 15, 2025
thanks--but my question is simple--how does indexing work on the withdrawal phase--I used he S&P 500 which in 2000 was by far the index of choice--how would the total market index have done-- it seems to me that everyone knows the accumulation situation but what about phase 2 for most folks? When you have numerous bear markets beginning in 2000 and you could easily live another 25-years how did whatever index you use do? do folks use index funds as part of their withdrawal portfolio?
Post: If I Didn’t Index
Link to comment from June 15, 2025
thanks--I think the question is how well, whatever indexes used, did they (it) perform from 2000 to 2024 or 03/31/25 during withdrawal--all I hear about is accumulation. For a decade or more all the action has been in U.S. markets so an international index of equities most like trailed somewhat significantly until maybe this year. At some time one usually begins withdrawing and if so is the equity portion indexed and if so what were the results in a 25-year period (2000-2024) that had a number of major bear markets. If one decides to have a 60/40 portfolio are the equity vehicles indexes such as those used during accumulation?
Post: If I Didn’t Index
Link to comment from June 15, 2025
yes, large cap value--yes, different time different results--but for many of us retired folks the year 2000 is, in my opinion, ideal, as is any period where you have major bear markets that make withdrawals very tricky--I want to see results for time periods that encompass the worst not the best. We are constantly told about beginning withdrawals in a down market cycle--well, this 25-year period is just that and is what constitutes a retirement period for maybe at least one spouse. So far I see in my readings here and other places accumulation is always the go to when index is discussed--when I watch NBA finals I see a game played on both sides of the court. In my humble opinion when setting up withdrawals from equity funds, volatility plays a major role. Ed Marsh below echoes my thoughts about spare time and complicated. In this house it has been very simple--4+3 and leave it alone. No green eye shades, no hours picking one index over another, no buckets --no nothing, don't even think about it. Now we have been investing for over 55-years using a few good funds and leaving things alone--adding monthly for those 55-years up to today. Buffett has the right idea when it comes to nervous energy and he is big on indexing to gain wealth--but what about withdrawal? Blue chip stocks--managed fund asset (in my case)--an emphasis on dividends which sure helps to moderate volatility. Works for me.
Post: If I Didn’t Index
Link to comment from June 14, 2025
Ran a hypothetical using a value fund we have had for decades and a 4% + 3% annual withdrawal. Compared to S&P 500 Index--began with $300,000 in year 2000 through 2025--we had numerous bear markets like the one in 2000 and who can forget 2008 as well as covid crushing us with a 33% decline followed by 2024 when stocks and bonds struggled. As of 03/31/2025 withdrawal was almost $444,000 from our fund, while the amount from the index was $431,000+ as it ran out of $ in January of 2024. Our fund at end of 1st quarter this year had a value of almost $744,000. How many people use the index as the equity portion of their withdrawal portfolio? I always hear it described as a wealth builder but to me that is half the game.
Post: If I Didn’t Index
Link to comment from June 14, 2025