Tom’s Blog

I shudder at the institutional default of 60% stocks and 40% bonds.

A prior post discussed the insurance value of bonds. When stocks tank, bond returns are always better and almost always MUCH BETTER – as much as 63 percentage points better in a year. Since we retirees are selling securities each year for our spending, we

The luck of the draw: building our nest egg and now spending it.

The purpose of this post is to describe how fate – the sequence of market returns we have faced and will face – affects our nest egg and spending in retirement.


The luck of the draw – random chance – had a big effect

“Why do I own bonds? The rate looks so low.”

My friend Betty asked that question and it’s a good one. The basic answer is that we own bonds as insurance to protect us from the DEVASTATION that BAD VARIABILITY of stocks returns would have on our portfolio. The returns from bonds are always greater

What do really bad sequences of stock returns actually look like?

When were retired we’re in the Spend and Invest phase. We’re withdrawing from our portfolio each year for our spending. We’re stressing its health each year. Most times it remains healthy or even grows to be super-healthy over our retirement. We Nest Eggers are most

Vanguard improves their Retirement Withdrawal Calculator. A lot.

Vanguard recently improved its display(s) of results of their Retirement nest egg calculator – their Retirement Withdrawal Calculator (RWC). I describe RWCs in Nest Egg Care (Chapter 2 and Appendix C), but here is a separate description. I rely on two key RWCs in Nest

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