I may be missing your point here, but I believe the "4% Rule" indicates that you should be able to withdraw 4% ($4K in this case) in the first year and INCREASE withdrawals for inflation so as not to lose purchasing power. Based on historical periods, including the periods beginning in the late 60s, and a reasonable stock allocation (50% to 75%), the original study showed that that all portfolios survived 30 years. Of course, the future may be different ...
We have 39% of our stock portfolio in international/emerging markets. Stocks make up 56% of the total so international is about 22% of our total portfolio. This allocation has underperformed in recent years until 2025. The expectation is that the international exposure will smooth out the ride rather than increase overall returns.
With the exception of our checking account and remaining 529 account funds (a topic for another thread), we consolidated our brokerage, 401(k), Roth, IRA and HSA accounts at Fidelity. I like having everything in one place and at one website and we are paying about 9 bps in expenses.
I retired at 61 one year ago after accepting a generous voluntary severance package from the large public utility where I worked for 35 years. Fortunately, our savings were in order when the opportunity presented itself, so I jumped at the chance to leave a couple of years early. Another deciding factor was the availability of retiree benefits; Premiums are greater than the employee rates but significantly less than public markets. With finances in good shape, we have been able to spend our days travelling, drinking coffee and chatting, hitting the gym or taking a walk, visiting the local pub and doing a bit of volunteer work, not necessarily in that order. No complaints so far.
Your young relative could take a time-tested and more conservative approach to this. Save up a down payment and then take out a 30-year mortgage for 80%-90% of the value of a primary residence. Consistently add money to your equity portfolio through workplace retirement plans, IRAs and brokerage accounts while you deleverage through monthly mortgage payments. Rinse and repeat for 30 to 40 years and you will have a substantial portfolio and will have paid off the debt in the process! Not flashy and won't make you rich quickly, but a strategy that worked for me and millions of others.
Harold, I think your assessment is spot on regarding the reduced number of public companies. It seems the availability of private equity (PE) funding is a significant driver. Private equity has traditionally been deemed appropriate only for sophisticated, high earning/high net worth investors. Recently and somewhat magically, it is now appropriate for 401(k) savers, most of whom are unable to perform the necessary due diligence to invest in opaque, illiquid investments. Now my question. Wouldn't it make more sense to push companies to go public if they want access to public funds rather than allowing PE and private credit (PC) to be offered in retirement savings plans? And if so, what can be done to prevent this from happening? The reporting and disclosure requirements for public companies DO provide value even if they are cumbersome. Prior to the existence of the SEC, main street investors were routinely fleeced. I worry that if PE/PC are allowed into retirement plans, we will see the average retirement saver/investor getting suckered into mediocre returns, or worse.
I am coming up on the end of my first year in retirement and life seems to be costing us about the same amount as when I was working. Apparently extra activities and travel, and perhaps some inflation, have offset work related costs, payroll taxes and savings.
Some would say that corporates are unnecessary, but I keep 10% to 15% in my portfolio, which is in line with the aggregate bond market, assuming a 50/50 portfolio. If 14.5% of those are exposed to AI and they take a 50% hit in a downturn, the total impact to my portfolio might be 1%. I figure the impact of AI on my bonds will likely be small. So, whatever you decide about your allocation, the effects of an AI meltdown on your bonds will probably be minimal.
Comments
I may be missing your point here, but I believe the "4% Rule" indicates that you should be able to withdraw 4% ($4K in this case) in the first year and INCREASE withdrawals for inflation so as not to lose purchasing power. Based on historical periods, including the periods beginning in the late 60s, and a reasonable stock allocation (50% to 75%), the original study showed that that all portfolios survived 30 years. Of course, the future may be different ...
Post: Considering a Lost Decade When Retirement Planning
Link to comment from January 15, 2026
We have 39% of our stock portfolio in international/emerging markets. Stocks make up 56% of the total so international is about 22% of our total portfolio. This allocation has underperformed in recent years until 2025. The expectation is that the international exposure will smooth out the ride rather than increase overall returns.
Post: International allocation
Link to comment from January 14, 2026
I second that sentiment Jan! Thanks Darlene!
Post: The impossibility of defining needs.
Link to comment from January 6, 2026
With the exception of our checking account and remaining 529 account funds (a topic for another thread), we consolidated our brokerage, 401(k), Roth, IRA and HSA accounts at Fidelity. I like having everything in one place and at one website and we are paying about 9 bps in expenses.
Post: Consolidating 401(k)s in retirement
Link to comment from January 5, 2026
I retired at 61 one year ago after accepting a generous voluntary severance package from the large public utility where I worked for 35 years. Fortunately, our savings were in order when the opportunity presented itself, so I jumped at the chance to leave a couple of years early. Another deciding factor was the availability of retiree benefits; Premiums are greater than the employee rates but significantly less than public markets. With finances in good shape, we have been able to spend our days travelling, drinking coffee and chatting, hitting the gym or taking a walk, visiting the local pub and doing a bit of volunteer work, not necessarily in that order. No complaints so far.
Post: What Age Did You Retire—and What Made You Decide It Was Time?
Link to comment from December 31, 2025
So, assuming I take 4% per year, ten years would be 40% in cash and fixed income resulting in a 60/40 portfolio. Hmm... ;)
Post: Would You Raid the Piggy Bank or Mortgage the House?
Link to comment from December 19, 2025
Your young relative could take a time-tested and more conservative approach to this. Save up a down payment and then take out a 30-year mortgage for 80%-90% of the value of a primary residence. Consistently add money to your equity portfolio through workplace retirement plans, IRAs and brokerage accounts while you deleverage through monthly mortgage payments. Rinse and repeat for 30 to 40 years and you will have a substantial portfolio and will have paid off the debt in the process! Not flashy and won't make you rich quickly, but a strategy that worked for me and millions of others.
Post: Modest Leverage for Young Investors
Link to comment from December 19, 2025
Harold, I think your assessment is spot on regarding the reduced number of public companies. It seems the availability of private equity (PE) funding is a significant driver. Private equity has traditionally been deemed appropriate only for sophisticated, high earning/high net worth investors. Recently and somewhat magically, it is now appropriate for 401(k) savers, most of whom are unable to perform the necessary due diligence to invest in opaque, illiquid investments. Now my question. Wouldn't it make more sense to push companies to go public if they want access to public funds rather than allowing PE and private credit (PC) to be offered in retirement savings plans? And if so, what can be done to prevent this from happening? The reporting and disclosure requirements for public companies DO provide value even if they are cumbersome. Prior to the existence of the SEC, main street investors were routinely fleeced. I worry that if PE/PC are allowed into retirement plans, we will see the average retirement saver/investor getting suckered into mediocre returns, or worse.
Post: The Incredible Shrinking — Stock Market?
Link to comment from December 18, 2025
I am coming up on the end of my first year in retirement and life seems to be costing us about the same amount as when I was working. Apparently extra activities and travel, and perhaps some inflation, have offset work related costs, payroll taxes and savings.
Post: 27 Months
Link to comment from December 15, 2025
Some would say that corporates are unnecessary, but I keep 10% to 15% in my portfolio, which is in line with the aggregate bond market, assuming a 50/50 portfolio. If 14.5% of those are exposed to AI and they take a 50% hit in a downturn, the total impact to my portfolio might be 1%. I figure the impact of AI on my bonds will likely be small. So, whatever you decide about your allocation, the effects of an AI meltdown on your bonds will probably be minimal.
Post: Which bond fund?
Link to comment from December 6, 2025