Retirement Income

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How to know if one is fully funded for retirement using Safe Withdrawal Rate approach

  If one's retirement portfolio is more than 22 times of their net retirement expenses (net is after adjusting for social security income), such retiree in essence has overfunded portfolio. If portfolio is 50% or more overfunded (say more than 33 times of one's net retirement expenses), such retiree does not have risk of running out of money, even if faced with significant portfolio drop during initial years of retirement. This allows such retiree capacity to go for more calculated risk such as potentially all stock portfolio without worrying about outliving their portfolio. Following excerpt from above referenced Bengen safe withdrawal study illustrates that decently overfunded (say 50%-100% overfunded) investor could potentially accrue several times of initial portfolio value if they are willing to leverage their capacity of 100-percent stock portfolio: "Can you imagine how much wealth would have accrued to an investor who had a 100-percent stock portfolio o...
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My first ever dabbling in buying on dip during 2022 market downturn turned out to be quiet exciting endeavor

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Wow!!! My first ever dabbling in buying on dip  during 2022 market downturn turned out to be quiet exciting endeavor. I primarily bought iShares Semiconductor ETF (SOXX). Let me share my experience from this experiment. Since I don't do market timing in general, I was not sitting on any cash for such buy on low exercise. Rather I used borrowed  funds from HELOC at prime minus 1% (3% average APR during last year) rate. I kept buying little bit on dip each time SOXX went down by 8%. As SOXX dropped around 36% last year, I ended up buying for around 80K. So far, with spectacular recovery of semiconductor sector this year, this experiment has generated almost 20% gain on my investment in it. My plan is to start selling SOXX slowly as it reaches it's record high in near future and keep selling for each 8% increment thereafter. Idea is to slowly pay off HELOC and then repeat this excercise again during next market correction/crash.  Glad to see my first buying on dip experimen...
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William Bengen’s seminal study about 4.5% Safe Withdrawal Rate for 30 years of inflation adjusted retirement income

Most commonly used retirement income planning strategies use actual expences , which I believe is more practical and includes one's spending habits and chosen life style. One of the most popular strategy uses 55/45 stock/bond conservative  retirement portfolio equal to 22 times  of desired initial yearly  needed expences (after accounting social security benefits). For example, say someone retires at age 67 and starts collection 50K social security benefit as joint household. With fully paid house, say household expences are 60K per year. So household needs remaining 10K from retirement portfolio to meet all expenses. Using above rule of 22, one just needs 220K (22*10K) portfolio to provide needed retirement income for rest of retirement years. Now, let's visit other scenario where household wants to retire earlier , say by age 62. Social Security benefits are reduced (25%) to around 40K per year in that case. Now household needs retirement portfolio to provide remaining ...
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