Total return, not distribution rate, is the proper measure of yield and return on investment.

No. Not when there are withdrawals. The mathematics changes. If you keep withdrawals below the dividend yield, assuming that the payout ratio is less than 100%, you will never run out of funds. If you require selling shares, as when there are zero dividends, you can run out of funds.

Have fun.

John Walter Russell
 

" I can't tell you how many baby boomers with substantial incomes and assets that I know who are putting their parents in medicaid nursing homes when they could afford to pay for a place for their parents, it would just mean scaling back their lifestyle some.  Why should they when they can get medicaid to pay?"

RE: Well, maybe, but First hand experience?

1. The Mother-In-Law syndrome.. No way Her and my Wife got along.. always Fighting, she was more like the Mother of 2 1/2 Men TV show..and always sarcastic..We tried for a Month and never worked out.. then Off to a senior Apartment Complex and she was very Happy and then to the Nursing Home for another Yr.. before she died..

2. Dad- Insisted on staying In His ( built his own) home, had the money to do it, after my  mother died.. He lived there for next 8 yrs before getting Cancer.. Still Stayed in it for another Year with the Help of us Kids comming and going and Hospice Care... Even after neumerouds offers to come live at any of us kids homes.. We respected his Wishes... He died in HIS bed... as he wanted too..

3. Aunt- She first went from House to Retirement Complex, then got partical Companion service then 24 hr Live In Companion service until she had to had Medical supervision 24/7 and thus the Nursing Home was the Only choice..

Medicare doesn't pay for normal -maintenance care, just for If needs Medical care... you pay until then and in most cases, by the time that is needed? Most don't live beyond  a Yr or 2..

That's why these Long Term Care Ins. Plans tell you> Only need to buy a 2-4 yr pay plan.. and yes there are exceptions.. based upon each individuals situation..

And do you really want to be Around your Kids & Grandkids, 24/7 while your dying? From having Accidents in the Hallway, Living room, Throwing up at the Dinner table, etc.. And  you best both Know CPR and have the Defibulator kit as well...  Just think of the mental Impact on them that would have-for the rest of their life..I know from a Man's Point of view (of not wanting to be a burden to being embarr-assed )... at least I don't..

And although you think you can do it? The stress & depression eventually wears you down ( My sister lost it many times and my Brother just couldn't cope to start with)

And I'd rather have some Young Lady take care of me!   Those Latino girls were Great with my Dad and My Aunt..I tipped ea. of them $50 wk and Both Dad and My Aunt were very happy with them..they knew at anytime, they  could bail and come to my place, etc..but didn't want too, especiall meeting others of their own age to do things with..

With the Advent of these 3 level of care , +55 places? I think could be the Answer.. for many that can afford them..I plan on it myself..

"Using a 30 yr period"..

Well I would guess that all depends on the individual and proably how much Younger their Wife/Spouse is... seeing as the ave life expectancy is only about 15 yrs now after retirement at age 66 ( 81 ) at best and a vast majority die before then..

And for those like myself, with T1 Insulin Diabetes and had to go on SSD at age 55? I'm just kidding myself, thinking I'm going to live another 30 yrs ( 85 ) and be lucky  I make till age 75..( We die and ave of 15 yrs sooner than Non T1's  and T2's die an average of 5 yrs sooner than Non-T2's )

And I've seen people 'Going Into the Final Yrs of the Their Lives" and the last few are spent Babling in a Nursing Home, not know the time of day, let alone what day it is.. and who cares were your at, just as long as your not Neglected and/or abused..

Now my 78 yr old Unlce is a different story, with a 58 yr old Wife.. That lucky Dog..

Of course, being Italian & a couple of Million $ helps...

LOL

 

 

And for those like myself, with T1 Insulin Diabetes and had to go on SSD at age 55? I'm just kidding myself, thinking I'm going to live another 30 yrs ( 85 ) and be lucky  I make till age 75..( We die and ave of 15 yrs sooner than Non T1's  and T2's die an average of 5 yrs sooner than Non-T2's )

For Limoman, regarding Single Premium Immediate Annuities from the Vanguard site.

Clients with medical conditions that may reduce their life expectancy may qualify for a “rated age”. A rated age is older than your actual age and based on your personal life expectancy as determined by a medical underwriter. A rated age applicant can either increase their income payments or reduce the premium amount needed to generate specific payment amounts.

Have fun.

John Walter Russell 

 

 

 

My mother's pension was $35/month.  There was no COLA.  My father had no pension.  They had no equities.  Most people didn't during that time frame.  The discount brokerages really didn't exist and middle class and poorer people hadn't had 401k's and there was no such thing as no-load mutual funds. I think the commissions on funds was 8+%.   I earned $200/mth.  My husband about the same.  Groceries cost me $35/wk including 2 cartoons of cigarettes.

Inflation and gas prices were a major reason that none of the portfolios survived in the studies.  We had 18% CD's and they were available for periods as long as 10 years.  Savings accounts paid high rates.   Were they factored into these fancy, high faluting academic studies?  Oh, and all these people whose portfolio's didn't survive - they did..  What aspect of reality did the studies omit? 

Roberta 

Well? Thanks to all of your for your Pro's and Con's on this Subject

It just further Conviences me to stay with my Active Managed Balanced funds + FAIRX for now and Live on the Least and Just hope for the best..

I need about 3.8% on my savings currently and if those funds even do 75% as well as they have in the next 10 yrs as they did in the past 10? I'll be ok..( past 10 = +12% x 75% = 9% ) and it will beat a comparable Index Port by +3.87893527% yr... ( the #'s would have gone farther but my calulator is only a 12 digit one....LOL )

I'll let you-all know how it works out in another 20 yrs...LOL

Elect Jimmy Carter!  We need those High CD's and Treasuries that My Dad Got back then, again!   Maybe Obama will be the next Jimmy Carter.. idealist..?

 I found exactly the opposite.  IF the next 35 years are like 1970-2004, you can investigate Paul Merriman's table of means and standard deviations of annual returns for each 10% increment of  an equities / bonds mix, with the equities split between domestic and international.  Using a Monte Carlo simulation, annual, constant withdrawals as high as 7.5K from a 100K portfolio lasted 30 years with a 90% or higher probability, no matter what equity-bond mix was used.   On the other hand, using only the S&P 500 index of all equities, annual withdrawals of 6K or less were required to have a 90% chance of the 100K surviving  30 years of constant withdrawals.  So if foreign becomes identical to domestic, then around a 6% withdrawal per year should give a 90% chance of success.

JWR1945a wrote the following post at 05-03-2008 3:43 PM:

They Got It Wrong

 

The original Safe Withdrawal Rate studies broke new ground. They advanced our knowledge of retirement finances tremendously. Yet, it is amazing how many things they got wrong.

 

http://www.early-retirement-planning-insights.com/they-got-it-wrong.html

 

Have fun.

 

John Walter Russell