Will it last?

RYAN  By Guest Blogger Ryan Lewenza

For much of my career I have been focusing on how to build wealth through stock/ETF selection and portfolio construction. Over this period I’ve spent little time looking at how one would spend their savings in retirement. That all changed the day I joined Turner Investments as for many of our clients, how much they can spend in retirement is their number one concern. This week we examine the optimal spending rate in retirement to ensure one will not outlive their money, just in case life goes into extra innings.

To determine this we first need to understand some basic numbers around retirement and life expectancy. According to Statistics Canada, the median retirement age in Canada is 62 for men and 61 for women. Unfortunately “Freedom 55” is becoming harder to attain these days with the 2007/08 financial crisis having a pronounced impact on investor portfolios, the labour market, and psychology, all of which has caused many Canadians to delay their retirement.

Looking at life expectancy with major advances in science and a rising awareness and education around health, Canadian life expectancy has risen markedly over the last few decades from 73 years in 1970 to 82 currently – men live to 80 and women 84. But this looks at the average age with many living well beyond this. According to Moshe Milevsky, an associate professor at York University, there is a 41% chance that at least one member of a 65 year old couple lives to 90. So this is what we need to solve for – the withdrawal rate from portfolios that will ensure savings will last at least 28 years (90 minus retirement age of 62).

For our clients we provide a detailed financial plan as they get close to or are in retirement. This detailed plan is a client’s roadmap in retirement which looks at things like how much they currently have, the growth they can expect, their expenses and what they can expect to withdraw in retirement. In order to build this financial plan we need to incorporate assumptions including long-term return and inflation estimates. These assumptions are critical in the projections of the plan and are important factors in determining one’s withdrawal rate.

So using our financial plan software and assumptions we can come up with different scenarios and isolate the optimal withdrawal rate to ensure one doesn’t outlive their assets. Specifically we assume: 1) investors are invested in a balanced portfolio with 60% in equities and 40% in fixed income; 2) over the long run this portfolio delivers returns of 6% after fees; and 3) that inflation will average 2% over the long-run.

Based on these assumptions we look at various withdrawal rates to see the number of years that the money would last. Based on a $1 million portfolio, 6% rate of return and 2% inflation, if one withdraws 4% or $40,000 per year, the portfolio will last over 50 years. For a 5% withdrawal rate the portfolio would last 37 years. And finally with a 6% withdrawal rate the portfolio would last 26 years, or roughly the amount of years that investors should plan for, based on the above life expectancy assumptions.

So based on these reasonable assumptions we believe the optimal withdrawal rate is around the 5% level, which maximizes the amount of annual income from the portfolio while ensuring the money lasts for the duration of one’s retirement/life.

Number of Years Money Will Last

Note: Assumes $1,000,000 portfolio, 6% long-term return and 2% inflation
Source: Turner Investments

Most academic research on this topic suggests 4% as the maximum safe withdrawal rate, otherwise known as the “4% rule”. This field of research was pioneered by William Bengen in his seminal 1994 report Determining Withdrawal Rates Using Historical Data. Based on his analysis of rolling historical return data he determined that a 4% withdrawal rate never exhausted a portfolio in less than 33 years. Based on his analysis he found 5% to be “risky” and a 6% withdrawal rate to be “gambling”. However, it’s important to note that his analysis was based on a 50/50 asset mix versus our preferred 60/40 balanced portfolio.

As people enter into retirement the conventional financial wisdom is that investors should reduce their equity exposure and increase their bond holdings to reduce risk. Often the “age – 100” formula is used to determine one’s equity weight. For example, a 30 year old, based on this this formula should have 70% in equities (30% in bonds) versus a 70 year old who should have just 30% in equities (70% in bonds). We disagree with this outdated premise given the historically low interest rate environment we’re currently in. Bonds just aren’t cutting it these days which is why we believe investors should continue to maintain a 60/40 asset mix well into their retirement years.

So there you have it. Older academic research suggests a 4% withdrawal rate but we believe most investors can safely depend on a 5% withdrawal rate which maximizes the amount they can take out each year while ensuring they don’t run out of savings in their later years. The question then is, can you live off a 5% withdrawal rate when you include other government pension income like CPP and OAS? If not then you either need to delay retirement and save more money, reduce your spending in retirement, or take on more equity exposure and the risk that this entails. We prefer the first two options.

Ryan Lewenza, CFA,CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

159 comments ↓

#1 Wrk.dover on 04.29.17 at 3:24 pm

There is some useful advice in that. Quite easy to accept the percentages as guidelines except for the thirty more years of 2% inflation and 6% returns.

#2 crowdedelevatorfartz on 04.29.17 at 3:28 pm

Excellent topic and answers several questions I had.
Thanks!

#3 cecilhenry on 04.29.17 at 3:28 pm

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#4 Skeena on 04.29.17 at 3:34 pm

You state that the 100-age equity weighting is outdated and that retirees should maintain a 60-40 split due to longer lifespans. What about the 30 year old in your example? Should he/she be maintaining a higher-than-70% equity weighting for the same reasons?

#5 Debtslavecreator on 04.29.17 at 3:49 pm

Great article Ryan
Completely agree
In my view the traditional view of holding 50-60 % bonds or an age based formula that automatically gives you the higher fixed income allocation is likely to disappoint the typical retiree
I also discuss the importance of the order of returns as this has a critical impact on how long your money will last
I emphasize to investors to avoid a sharp drop 4-5 years before and 4-5 years at the start of retirement

And yes CPP will be there but the issue will be inflation including the likely sharp rise in taxation
What will your CPP buy you in 10-20 years ? I do expect many will likely run into hardship in their 70-80 s if they rely too much on pensions and/or a portfolio heavily weighted in bonds
Cheers

#6 mike from mtl on 04.29.17 at 3:49 pm

Other than your clients, I doubt there’s many canucks with seven figure portfolios much less six – and no I am not including residential RE (favourite of us) or HELOC.

RE is an asset yes but produces nothing & costs to own. For sure owning free and clear is a huge bonus… but health will dictate for how long. Once one spouse inevitably die or becomes gravely ill RE becomes a massive pain the butt. in your’ assistive care’ years, figure at least 4k a month.

Perhaps left floating on a iceberg is not such a bad sendoff?

#7 David McDonald on 04.29.17 at 3:50 pm

For retirees, taking care of financial health is important but maintaining physical and mental health is even more vital. It doesn’t matter to you how well your portfolio performs if you have Alzheimer’s. On the other hand, if you are healthy, having a little extra cash to escape the Canadian winter is a good thing.
From Santiago Chile – coming home May 1!

#8 Alice on 04.29.17 at 3:50 pm

Everyone arguing that mortgages in arrears mean the markets are healthy needs to read this.

https://betterdwelling.com/mortgage-defaults-dont-indicate-real-estate-bubble-lack-defaults/

#9 Ron on 04.29.17 at 3:50 pm

Any advice for how the 1 million+ Americans living in Canada who are restricted from owning ETFs can achieve diversification?

Is it impractical for an individual to try and manage basket of 50+ stocks ?

Of course you can own ETFs. — Garth

#10 OttawaMike on 04.29.17 at 4:01 pm

Hey Ryan,
Whatever happened to all the financial industry wizards who almost blew up the world economy and caused untold suffering and delayed retirement for millions of people?

#11 espressobob on 04.29.17 at 4:15 pm

Retirement and bourbon, can’t wait.

https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf

#12 Don Saunders on 04.29.17 at 4:16 pm

A 4% withdrawal rate is too high. We are not in the world of 5% to 6% government bond yields, 4.25% to 4.5% 5 year GIC rates and stock market returns of 20% to 30% a year for years back in the 1990’s.

A more realistic rate is anywhere from 2.0% to 2.5% at most. These days the most important factor that most Canadians are really in deep trouble is too much high interest debt and depreciating assets debt, too much house debt.

I am talking about car loans, vehicle loans, credit card debt, personal loans and lines and mortgage debt that is not the prime rate debt.

You look at car, vehicle payments of $350 to $500 a month, credit card payments of $300 to $400 a month and some other debt payments and you are easily in the $1,500 to $3,000 a month range.

If you don’t have a $1,200 a month total debt payment that is equivalent from anywhere of $18,000 to $22,000 a year of gross income you don’t have to earn, make from any investments, registered RRSP’s, RRIF’s or non-registered GIC’s, bonds, ETF’s etc.

This will make your needed annual withdrawal rate much lower in retirement and more sustainable.

#13 akashic records on 04.29.17 at 4:17 pm

2 billion dollar is nothing.

Trudeau in his first 100 days in office as PM gave away 4.4 billion dollars just for foreign aid.

#14 I'm Not Poloz on 04.29.17 at 4:18 pm

What happens when Poloz collapses the Loonie to 50c to protect the Toronto Bubble?

What happens when a man marries, and the woman follow advice from Buzzfeed to later divorce and cause the pillage of assets in the Divorce Court?

What happens when a professional female accuses you of harassment, discrimination, sexism, and you are sued?

Life isn’t easy in Canada under Poloz.

#15 Free Bird on 04.29.17 at 4:23 pm

#4 Skeena

Based on this seems Ryan is (at least in part) basing the advice against the age rule and for the 60/40 split on rates and bonds. I’m sure longer life spans are in the mix.

“…given the historically low interest rate environment we’re currently in. Bonds just aren’t cutting it these days…”

Good question for those younger. Not me anymore ; ) but
for other readers, yes.

Hope Ryan and Doug are dusting off those (fictional?) Porsches for the summer.

#16 Pre-retiree on 04.29.17 at 4:34 pm

To #126 ShawnG in TO from yesterday:
in addition to doctors getting incorporated, the nurses and technicians and everyone else depend on hoopp might consider getting incorporated, since their pension may not all be there when they want it.
________________________________

I am happy for you that you know so much about pensions. However, just to make it clear. Doctors that are not on salary and other professionals can and do incorporate. However, salaried employees that are part of HOOPP cannot. It is very simple indeed. There would be the rare individual who would be salaried, and part of a pension, and who potentially could also run a separate business for which incorporation would be possible.
Didn’t think that needed to be spelled out on this blog of all places.

#17 crossbordershopper on 04.29.17 at 4:36 pm

like millions of other poor seniors, its simple, we spend every dollar the government provides us, since well, we have no other “income”.
simple 100% withdraw every year and still have the income stream until we die.
Canada is the greatest country in the world to be poor, perhaps sweden is better , well till they get diluted down.

#18 common sense on 04.29.17 at 4:41 pm

#3 Cecil

Look who is responsible for all 3 sources you cite..

Motley Fool.

Enough said. They would pimp their mothers for a nickel.

#19 Beautiful Girl on 04.29.17 at 4:42 pm

Best post I have ever read since reading this blog 6 months ago
Thankyou very much

#20 Doug in London on 04.29.17 at 5:02 pm

“Freedom 55” is becoming harder to attain these days with the 2007/08 financial crisis having a pronounced impact on investor portfolios.
———————————————————–
Really? During the financial crisis I cashed in some bond funds and scooped up equity funds and stocks that were ON SALE and made some good capital gains afterwards when prices recovered. The financial crisis actually helped my portfolio.

#21 ww1 on 04.29.17 at 5:07 pm

The problem I always have with articles about “How much money do you need?” and “How much money can you withdraw?” is that in the interest of simplicity, they do not make a distinction between pre-tax (e.g. RRSP) and post-tax savings.

#22 Penny Henny on 04.29.17 at 5:13 pm

The best retirement calculator I have ever come across.
https://financialmentor.com/calculator/best-retirement-calculator

For those hoping or planning to retire soon here is a little tip. Start tracking ALL your spending for a period of 3-6 months. See what you need to live and where you spend your money.

#23 Ron on 04.29.17 at 5:15 pm

Any advice for how the 1 million+ Americans living in Canada who are restricted from owning ETFs can achieve diversification?

Is it impractical for an individual to try and manage basket of 50+ stocks ?

Of course you can own ETFs. — Garth

——————————————–

Canadian ETFs and mutual funds are considered PFICs (Passive Foreign Investment Company) subject to complex reporting and punitive taxation by the I.R.S.

Sure, an American can own them, but tax compliance is a major headache.

Generally, American expats can not take advantage of Canadian tax deferral vehicles such as incorporating a service company or even having a TFSA.

This information comes to me from many hours reading the Internal Revenue Code and paying $500/hr cross border accountants and lawyers for advice.

You wasted money. TFSAs are an accounting pain. The IRS doesn’t care about ETFs, which follow indices. — Garth

#24 just a dude on 04.29.17 at 5:18 pm

Ryan,

Excellent post. Thank you.

I recently read Fred Vettese’s latest book, The Essential Retirement Guide, a Contrarian’s Perspectice which covers the retirement income side of things very well & very definitely worth reading.

#25 For those about to flop... on 04.29.17 at 5:19 pm

InfLewenza,I sent the boss this photo with your name on a Victoria’s Secret bag a couple of weeks ago in time for your last column to stir you.

I wasn’t sure if he was ever going to use it ,or if you took offence to it and asked where he got it I knew I would be mud after my infamous ” doctors office ” joke upon your debut.

Anyway,I’m glad you and Robax chip in on Saturdays and I hope the photo gave you a laugh.

I just got back from voting NDP ,how big a joke is that…

M42BC

#26 MicroGX on 04.29.17 at 5:19 pm

A good read, thanks Ryan.

#27 Question , Ryan on 04.29.17 at 5:27 pm

60/40 seems very dangerous , exposed heavily in equities ; a 2008 would change the game

How would you protect the client ? Selling capital at a low to put food on the Table is not ideal . Leave at least 1 yr expenses in a no risk vehicle ?

Good article

#28 For those about to flop... on 04.29.17 at 5:35 pm

My beloved Boom once wrote me about being too conservative and suggested the following formula to be considered as a rough guide.

80% equity 20% bonds in your 30s

70% equity 30% bonds in your 40s

60% equity 40% bonds in your 50s and 60s

Well after starting of at 60/40 and realizing there is a solid chance that I won’t have enough money to retire before expiring,I took his advice and switched to a 70/30 mix which after being nervous about have now embraced as normal for the next while…

M42BC
M64WI

#29 Tuxedo on 04.29.17 at 5:39 pm

Great article Ryan! Was listening to a great Meb Faber podcast with Edelman. Edelman is a bit of a futurist but talks a lot about longevity and investing. The old bond/stock ratio rules are definitely over.
30+ year retirements mean that 60/40 should be a minimum. I believe that in the next few decades 80/20 will be the new norm, unless you throw a lot of High Yield & Corps in the fixed income section.

#30 Tuxedo on 04.29.17 at 5:42 pm

#3 cecilhenry

Stock investors and certainly investment newsletter subscribers are the definition of “foolish”.

ETFs are the way to go. Leave stocks for the “professional” investors who make a living ripping off their sucker clients.

#31 Lulu on 04.29.17 at 5:57 pm

With 100k spare to spend, what is your best suggestion? Mr Ryan Lewenza

#32 Piet on 04.29.17 at 6:01 pm

“Bonds just aren’t cutting it these days which is why we believe investors should continue to maintain a 60/40 asset mix well into their retirement years.”

Around the time of my 60th birthday last fall it seemed prudent to tweak the balance a bit from equities toward bonds. A few days later Trump was elected, stocks took off, and bonds tanked. So much for traditional wisdom.

#33 Penny Henny on 04.29.17 at 6:02 pm

for Turnernation-
scroll down for brief write up on 301Turbo
http://driving.ca/pontiac/auto-news/news/its-been-eight-years-since-the-death-of-pontiac-here-are-their-8-greatest-ideas

#34 Ryan Lewenza on 04.29.17 at 6:03 pm

Skeena “You state that the 100-age equity weighting is outdated and that retirees should maintain a 60-40 split due to longer lifespans. What about the 30 year old in your example? Should he/she be maintaining a higher-than-70% equity weighting for the same reasons?”

No I think it works for the 30 year old. We’re not risk junkies at Turner Investments so we would rarely recommend any investor (young or old) have more than 70% in equities. My issue is more on the back end as the formula suggests having little equity exposure in retirement, which given the low interest rate environment is not advisable. – Ryan L

#35 Ryan Lewenza on 04.29.17 at 6:11 pm

OttawaMike “Hey Ryan, Whatever happened to all the financial industry wizards who almost blew up the world economy and caused untold suffering and delayed retirement for millions of people?”

Some of them (eg Cohn and Mnuchin) became key members of President Trump’s cabinet. – Ryan L

#36 How Much on 04.29.17 at 6:14 pm

Another place for info on this subject is book by
Jim Otar the retirement myth.

#37 Long-Time Lurker on 04.29.17 at 6:19 pm

Good article, Ryan. Nice photo.

#38 They don't ring a bell at the top on 04.29.17 at 6:21 pm

How silly. Who wants to live 30-50 years in retirement? Here’s a thought. Live it up at 10% withdrawal.. if at that rate I feel I might outlive my funds, I’ll take up smoking and drinking. Cigarettes, cigars, pipe, cognac, fine scotch , what have you. Have a nice life. No Alzheimer for me, thank you very much.

#39 earlybird on 04.29.17 at 6:27 pm

haha…2% inflation….good one…

#40 Gramps on 04.29.17 at 6:37 pm

$1000000×5%=$50000/yr
Divide by 2080 hrs/yr=$29hr wage
Ya I can live on that.
But I want to spend more from 60 to 75
Won’t need as much past 75…?
$1000000 still enuf?

#41 NOTHING SURPRISES on 04.29.17 at 6:43 pm

I believe a couple with maximum CPP and OAS per month and qualifying for the GIS would have an income of about $36,000/yr. paying no income tax at this time 2017.

Only $4000 short of your $40,000/yr.
The $4000 could be generated using your formula with only $100,000 in investments.

Anything above this investment amount is really not required to fund their retirement at this time and allows them to build their nest egg thanks to the CPP and OAS (disregarding any political view about OAS that does not impact or is relevant to the above anyway).

#42 Oslerscodes on 04.29.17 at 6:44 pm

The most thoughtful analysis I’ve read about this comes recently from the blog earlyretirementnow.com .

I think they’re up to 13 articles in their series examining fixed (as Ryan suggests) vs. Dynamic withdrawal rates, stock/bond mixes and market valuations at the time of saying goodbye to your paycheque.

There are some assumptions in the Trinity study – namely that I plan on living for more than a 30y retirement- that they’ve shed light on.

Highly suggest having a look – particularly if you’re shooting for early retirement.

#43 Gasbag Boomer on 04.29.17 at 7:09 pm

#38 don’t tempt me, btw you forgot LSD.

#44 Russ on 04.29.17 at 7:12 pm

espressobob on 04.29.17 at 4:15 pm

Retirement and bourbon, can’t wait.

https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf
================================

Hi Bob,

The Vanguard calculator didn’t work on my ol’ XP box.

So here’s one I use occasionally:
https://tools.td.com/retirement-calculator/

It’s good fun and back-up to the finance guys looking after me. The value they add, which should not be overlooked, is figuring the best tax advantage income strategy for my impending retirement.

I may not be richer than I think but it sure looks good in the future for me :)
Not so much today, looking out over the beach in the Tofino area waiting for the rain to stop.

A guy can have worse problems, I know.

Cheers, R

#45 Timmy on 04.29.17 at 7:13 pm

Good article, though any idea how many people will have a million dollars worth of investments when they retire? Would this be the top 20 percentile of Canadians? I’m in my early 50s and though I’m almost half way there, most of my friends have nowhere near this amount.

#46 akashic records on 04.29.17 at 7:15 pm

People who still think.

Camille Paglia

https://www.youtube.com/watch?v=qS1my8S0Q8Q

#47 A Yank in BC on 04.29.17 at 7:16 pm

Ryan.. what about heirs? A 5% withdrawal rate over 30 years will deplete a portfolio to nothing.. or close to it.

#48 crowdedelevatorfartz on 04.29.17 at 7:25 pm

@#38 Ring my bell…
“Who wants to live 30-50 years in retirement?…..I’ll take up smoking and drinking. Cigarettes, cigars, pipe, cognac, fine scotch , what have you….”
++++++

Sooo, if you live like THIS guy and live til 99…

http://www.azquotes.com/quote/635806

you’ll be eating cat food at 75 if you spend like a mad man……

Like Trumpocalypse2017 says….Prepare NOW!

#49 Fred on 04.29.17 at 7:26 pm

sadly, with yield no where to be found greater risk is needed.

have a two-yr cash (for basic expenses) set aside in a liquid, no risk entity. This is a safety feature. A 30-40% correction (see 2008) can change the numbers dramatically. A balanced fund likely will recover in 2 yrs, ensuring you aint selling low

#50 crowdedelevatorfartz on 04.29.17 at 7:30 pm

@#25 Flopster
“I just got back from voting NDP ,how big a joke is that…..”
++++

I still havent recieved my frickin voters card….
But I’ll be doing the EXACT same thing.
Holding my nose and voting NDP…..

#51 Nonplused on 04.29.17 at 7:32 pm

If you don’t work for the government, chances are retirement is a myth you’ve been sold by the financial industry but can’t ever achieve. (Remember those “Freedom 55” commercials? Anyone who bought into that is working at Walmart now.)

A $1 million dollar portfolio kicking out 5% or $50,000 a year is going to be pretty slim living for a couple, assuming marriage is still legal by the time I retire. So what a couple probably needs is $1.5 – 2 million in assets at retirement, giving them $75,000+ a year. Who has that much money or can possibly save it when they only earn $75,000 a year and send 25% of it off to the various levels of taxation? It’s not going to happen for most people.

Retirement is a fallacy. Only government employees and the 0.1% can really consider it an option. Many of the 1% will never be able to do it. Maybe you can get down to part time work but you cannot retire unless you want to live in a chicken coup.

The reality is that for most people who do not have government pensions or are not in the 0.1%, after taxes (of which there are so many and they keep adding more), living expenses (which keep going up), exploding housing costs, spiraling transportation costs even for transit, and paying for your kid to play soccer, there isn’t much money left to save. If there were everybody’s RRSP and TFSA would be topped out.

I’m not a jealous guy so I don’t begrudge the 0.1%, if they came by their money legitimately. The government employees on the other hand, get to retire because I don’t, I have to pay my taxes. And don’t get me going on how government employees pay taxes too, they don’t. The government pays them their tax money and then takes it back again. It’s just a digital loop. If you took an $84,000 dollar a year teacher and paid him/her $60,000 a year with no taxes it would have zero effect on either the teacher’s lifestyle or the government’s net revenue. They are phony numbers, just there to keep the comparisons to other working people relatively equal. Government employees get paid by taxes, they don’t pay taxes. Same with their retirement pensions. That doesn’t mean they don’t do important work, just that we can’t count their taxes as government revenue.

So to sum, if we want some fairness in all of this defined benefit pensions for government employees have to go and they can save for retirement just like the rest of us. No more teachers retiring after 25 years on the full scale. For cops, fire fighters, and the army maybe you still have to retire them after 25 years because otherwise they would be too old to do it. But there must be something they can do around the fire hall on a reduced salary that would mean the pension doesn’t have to be so dang high.

So in short, if you don’t have a government pension and aren’t in the 0.1%, full retirement is a myth. But, as JC himself said in Mathew 6:34:

“Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. Sufficient unto the day is the evil thereof.”

Save if you can, invest if you can, but don’t make too many plans until your chicks all hatch. Thinking too far ahead is the stuff of “the best laid plans of mice and men”. It’s great if you are Donald Trump, but for most of us it’s pure frustration and disappointment. And even Donald is probably pretty much got a wake up call with his new job. (At 70, when if he were sane he’d just be retired.)

#52 Frank on 04.29.17 at 7:39 pm

According to Stats Can, the upper middle 20 percent net worth was $475K…far less than a million. So if 80 percent of the population has less than a million in assets then I wonder how they plan for retirement?

#53 Nick on 04.29.17 at 7:40 pm

It’s obviously tempting to try to provide simple answers to apparently simple questions such as “how much can I safely spend in retirement?” Unfortunately, this is not a simple question at all. Would you propose a financial plan to a client without asking any questions about assets, risk tolerance and investment objectives? Of course not, that would be professional negligence. So why is advising people on retirement finance different?

First, let me say that that I am retired, living on the yield from my investment portfolio, so unlike most financial planning advisors I know what I’m talking about from actual experience. I allowed my bond ladder to expire over the last five years and replaced the maturing bonds with preferreds. I’m quite amazed that you guys continue to claim that a portfolio with 40% bonds can yield 6% overall. That 40% allocation to fixed income is underperforming the stock market so much that the 60% allocation to equities has to yield much more then 6% to get to 6% overall. I have never seen an actual example of this 60/40 portfolio with the 6% yield after fees, so either show us one or stop claiming it is easily and routinely achieved.

I think anyone who is retired and living off a $1M+ portfolio with $400K or more in bonds is nuts. Forget about CPP and OAS (for many retirees, this doesn’t amount to much), this person’s pension fund is the portfolio. Assuming the portfolio is reasonably diversified, you can see trouble coming from far enough off to take some corrective action. Accepting the absurdly low returns that bonds provide is crazy if your objective is income. The risk/reward ratio is much more attractive for preferreds.

Now, to the question of spending, what about debt and non-portfolio assets? I have no debt and a significant real estate asset. Yeah, the bubble’s gonna burst blah blah blah but my $2M house will never be worthless. So I need a lot less income than a retiree with car loans, credit card balances, and maybe a mortgage. Also, my kids are both young professionals and don’t need financial help from me. Not so for many retirees.

So, I could live on your $50K/year recommendation for a $1M portfolio (is that before tax?) but I wouldn’t want to and most retirees could not.

Frankly, your column pretends to provide sage advice but is actually quite meaningless. I would have expected better from an investment “professional.”

We expect more from readers. It’s been stated numerous times here that the 40% fixed income allocation in my suggested balanced portfolio is not bonds. — Garth

#54 traderJim on 04.29.17 at 7:45 pm

@Ryan

I like playing with these forecasting models as much as anyone, but they can so easily go off the rails they really should be taken with a grain of salt.

What happens if inflation is 4%? That could easily happen, especially if we are talking about a younger person with a long time horizon.

Perhaps a moot point, as I agree with the general thrust, equities are the best long term bet (and US equities would be by far my personal favourite), and people should probably have more equities in general.

And for people who can foresee the future, such as Smoking Man and I, short term currency speculation is all you need.

That’s because the stress will shorten your lifespan enough that you don’t need to worry about out-living your money.

#55 Tony on 04.29.17 at 7:49 pm

If you have more than enough money worry about your health not retirement. Blowing through millions of dollars a year in hospital bills can end your retirement.

#56 Jungle on 04.29.17 at 7:50 pm

Excellent post.

Yes I would agree one could look at higher withdraw rate if we factor in CPP, OAS/GIS (if possible)

For many boomers they wont see or have any portfolio for their retirement..

The easiest plan for them is to reduce spending/expenses and become smarlty frugal, and get out of debt.

Work part time in retirement for some extra income on the side.

#57 conan on 04.29.17 at 7:51 pm

Your plan is only good for non registered funds. The non one percenters have to use RIF withdrawal tables. At age 66 the laws says its slightly more then 4 %. It goes up to 12% by age 90, and 20% at age 95 an over

Females with long life genes might want to solve til age 100. Do not use age 90. The market is due for a correction. Buy and hold advisers will not tell you that.

So if you were to invest in an ETF fund as suggested, and a 2008 event happened, you are officially f’d.
Take a look at insurance products before making a decision. The fees are worth it if you are forced to RIF because of age laws.

Not saying the insurance products are always better, but sometimes they are.

In 2008 a balanced portfolio lost 20% and recovered in one year, then advanced 17% the next year. Average annual return over the three years of the crisis – 5%. How is that so hard to survive? — Garth

#58 TurnerNation on 04.29.17 at 7:53 pm

#33 Henny (short for Hennessey? ) good stuff. Knew an owner never went in it. Likely it died as Boomers know there’s no replacement for displacement ;)

Never a fan of (single) turbos – too hairy esp in FWD, torque steer’ll rip steering wheel out of your hand. Pick and two of: acceleration, traction, steering. That’s all FWD at once may accomplish.

#59 Nick on 04.29.17 at 7:56 pm

Garth – can you provide a link to your “suggested balanced portfolio?” And since when does “fixed income” not equate to “bonds” or “T-bills” in standard investment terminology?

Since forever. — Garth

#60 D C on 04.29.17 at 7:57 pm

1: @BC_Doc, I await the reply email to your query, thanks! Truly, I’m not too stressed about it (ie: even completely losing that $$ won’t prevent my kid from becoming ‘ON_Doc!’); but it’s definitely useful info for many people who place trust in CDIC investments as part of their portfolios.

2: Re today’s topic, Garth’s earlier ‘protégés’ also wrote a couple good blogs about this very topic, including advice about a multi-year cash cushion to weather changing market conditions and a “bucket” concept to address how to structure your post-retirement assets:

http://www.millennial-revolution.com/invest/workshop-invest/investment-workshop-15-withdrawing-portfolio/

http://www.millennial-revolution.com/invest/sequence-of-returns-how-not-to-fail-at-retiring-early/

#61 Leo Trollstoy on 04.29.17 at 8:08 pm

My 68 yo friend owns 4 12 unit multi family. All paid off for almost 20 yrs now. He doesnt care about this stuff

#62 TurnerNation on 04.29.17 at 8:08 pm

Yes every man remembers being a boy and coming of age: noticing those sensuous curves, exotic smells. How they felt in your hand.
Of course I’m talking about cars.
I had two paper routes allowing me easy access to viewing models.

M41ON

#63 dakkie on 04.29.17 at 8:09 pm

Chilling Thing Insiders Said about Canada’s House Price Bubble

http://investmentwatchblog.com/chilling-thing-insiders-said-about-canadas-house-price-bubble/

#64 mark on 04.29.17 at 8:11 pm

You guys use XPLAN?

#65 For those about to flop... on 04.29.17 at 8:12 pm

We expect more from readers. It’s been stated numerous times here that the 40% fixed income allocation in my suggested balanced portfolio is not bonds. — Garth

///////////////////////////////

Hey boss, yeah I probably booted it a bit at my post at #28.

I should have used the word “fixed ” instead of “bonds” but I was just trying to help people out like Boom did regularly for me.

I don’t own any Preferreds but I did prefer it when we had our online bond…

M42BC
M64WI

#66 Ron on 04.29.17 at 8:14 pm

Is there any room for leveraged ETFs in a balanced portfolio?

Yes, they amplify volatility, but on a multi-decade horizon, won’t a leveraged index ETF be expected to beat a non-leveraged index ETF?

#67 Wrk.dover on 04.29.17 at 8:17 pm

If you don’t know exactly how much each of every thing your money goes to individually totals per year, and don’t own cars and a house outright, and have not saved 1/4 of your income for several years, you are not retirement material.

If yes, CPP and OAS is more the lions share of what you will need.

Tapering the savings contribution eventually, years after retiring is the inflation protection.

#68 Timberr on 04.29.17 at 8:47 pm

Our beloved Ryan is not only guiding the wrinklies in their retirement pursuits, but also helping the moisters from blowing their stash on frivolous weddings.

Skip to 16:10 min mark for all the action!!

http://www.cbc.ca/marketplace/episodes/2015-2016/weddings

#69 TCContrarian on 04.29.17 at 8:50 pm

60/40, 100-age etc etc…….over-simplifications based on the premise that the markets are totally unpredictable and random.

The contrarian mindset dictates buying unloved assets (which are going to be priced ‘low’, historically), whilst selling highly popular assets (and hence, ‘over-valued’), such as GTA RE currently.

With any sort of discipline and applying these relatively simple ideas, one can achieve outsized gains – no matter how old you are.

TCC

#70 Wicked as it seems on 04.29.17 at 8:51 pm

So we can assume for a single person half the amount the numbers still work?
500k invested and living in Ecuador or Vietnam, you don’t only sound rich, you are!

#71 Mel on 04.29.17 at 8:55 pm

Helpfull site for RRSP/RRIF withdrawal amounts required by Gov.

http://www.taxtips.ca/calculators/rrsp-rrif/rrsp-rrif-withdrawal-calculator.htm

#72 Smoking Man on 04.29.17 at 9:06 pm

Ryan, are you and Doug coming up to the blog dog meet up on Saturday May 13th at the general store 1:30 pm start time. People were taking high noon the wrong way.

I don’t sign autographs, but I might make an exception in your case.

I want to see if my wife’s car is better than yours.

#73 Dobermanduke on 04.29.17 at 9:08 pm

#51 Nick

Congratulations if you are living off your yield.
They are under no obligation to spill the beans on how they make their living, pro bono, to blog dogs. This is a financial blog not a free financial makeover. Might be worth the .7% to find out.

#74 Alba on 04.29.17 at 9:31 pm

@#25 Flopster
“I just got back from voting NDP ,how big a joke is that…..”
++++

I still havent recieved my frickin voters card….
But I’ll be doing the EXACT same thing.
Holding my nose and voting NDP…..
*********************************************

You don’t need your voters card. Just show up at a polling station as long as you have 2 pieces of id. One piece must be government issued such as DL, citizenship, provincial id and the other can be a bill showing your address.

#75 conan on 04.29.17 at 9:42 pm

In 2008 a balanced portfolio lost 20% and recovered in one year” Garth

There were a lot of people who were invested in 2000 (tech meltdown) got hit again in 2001, then the final nail in 2008. Not many people did well during that decade.

The markets can be cruel. Young people can weather it. Over 65 and locked into RIF payouts, it is a different story.

You missed the point entirely. A balanced portfolio gives growth but gets you off the roller-coaster of volatility. The financial crisis proved that in spades. — Garth

#76 The Greater Cauliflower on 04.29.17 at 10:05 pm

Could you consider GIS & CPP as part of your fixed income component, then readjust your portfolio to say maybe 65-70% equities ?

#77 Doug in London on 04.29.17 at 10:09 pm

@conan, post #73:
You obviously don’t get the idea that these meltdowns, as you call them, are buying opportunities. During the bull market of 1999 to 2000, I moved some money out of equities (and sold ALL of my science and tech funds by October 1999) and moved it into bond funds. When stocks went on sale from 2001 to 2003 I cashed in the bond funds and bought back cheaper equity funds. Similarly, bit by bit from 2005 to early 2008 I cashed in some of my equity funds and bought bond funds. In late 2008 and early 2009 I reversed the flow, buying back DIRT CHEAP equity funds. I fail to see how ANYONE could possibly lose money when stocks go on sale, since such times are AMAZING buying opportunities.

#78 X on 04.29.17 at 10:11 pm

The economy needs RE to continue to thrive, as we don’t have much else to rely on. RE is what? 15% of the economy now.

The provinces and cities need high rates, to base property taxes on, and for land transfer taxes and such.

Which is probably why BC re introduced the first time buyer free money thingy.

Rates aren’t going up in a hurry.

Gov’t wants to look like they are doing something, but not actually do too much at all.

Too bad doing the right thing doesn’t always get one re elected.

#79 Steve French on 04.29.17 at 10:17 pm

Hey Smoking Man:

What do you think of this… your all-time hero Johnny Cash… hanging out with a Communist…?!

hehe… (Smokey’s head explodes…)

https://www.youtube.com/watch?v=C_Fd9W4M9P0

#80 crowdedelevatorfartz on 04.29.17 at 10:27 pm

@#72 Alba
‘You don’t need your voters card…”
****

Yep. Checked the Elections BC Website.
Gonna vote “Anyone but Christy” tomorrow am

#81 For those about to flop... on 04.29.17 at 10:41 pm

#49 crowdedelevatorfartz on 04.29.17 at 7:30 pm
@#25 Flopster
“I just got back from voting NDP ,how big a joke is that…..”
++++

I still havent recieved my frickin voters card….
But I’ll be doing the EXACT same thing.
Holding my nose and voting NDP…..

/////////////////////////////

Hey Crowdie ,it’s a pity you don’t live in my riding.

You could have done a protest vote for a guy named Mr Simon Rear.

Right up your alley…

M42BC

http://globalnews.ca/news/3383430/b-c-election-2017-vancouver-kensington-riding/

#82 Mark on 04.29.17 at 10:45 pm

“Is there any room for leveraged ETFs in a balanced portfolio?
Yes, they amplify volatility, but on a multi-decade horizon, won’t a leveraged index ETF be expected to beat a non-leveraged index ETF?”

No. The problem with leveraged ETFs is that they suffer what is known as the “constant leverage trap”. Because they’re always buying and selling, they’re tax inefficient. They’re also always paying spreads to their counterparties when they trade in and out of securities to effect the leverage. Most leveraged ETFs trend to zero and probably shouldn’t be owned by anyone. They’re horrible products that really only create wealth for their sponsors, and for the market makers that trade against them.

#83 Smoking Man on 04.29.17 at 10:46 pm

#77 Steve French on 04.29.17 at 10:17 pm
Hey Smoking Man:

What do you think of this… your all-time hero Johnny Cash… hanging out with a Communist…?!

hehe… (Smokey’s head explodes…)

https://www.youtube.com/watch?v=C_Fd9W4M9P0

…….

I have dogs. Two of them. They love me true.

I give no shit of what people think of me. My dogs everything.

#84 Sir James on 04.29.17 at 10:46 pm

“It’s Just Crazy” (Again): 2-Bedroom LA House Sells 40% Above Asking

http://www.zerohedge.com/news/2017-04-29/%E2%80%9Cit%E2%80%99s-just-crazy-2-bedroom-la-house-sells-40-above-asking

#85 WUL on 04.29.17 at 11:06 pm

FLOP:

I answered my obligation to you by sending $20 to the Red Cross. Last time I bet on an AFL game. I got no business there. I will now turn to the ponies for the Run For The Roses.

Is your riding Vancouver-Langara? I cannot tell you why I have a strong interest in that riding. Garth can Google my surname. He is discrete.

#86 WUL on 04.29.17 at 11:08 pm

Discreet.

#87 conan on 04.29.17 at 11:30 pm

RE #75 Doug in London on 04.29.17 at 10:09 pm

The recommended portfolio on this site is 80- 20? Since Preferred shares tend to do down in value in tandem with regular stock, I belong to the camp that believe that they are more like equities then bonds.

So in a down market, that only leaves 20 % bonds to sell and reinvest in equities. Meaning, the Rif is almost all equities. At the same time, an income is being taken at all times. If we have 2000, 2001, then 2008 scenario, and your in a RIF, your fd.

I understand the concept of buying into the market when it has sold off. Do you understand the concept of RIFs? That 99% of people have all of their money in them because of registered money tax laws?

Maybe 20 years from now people will have most of their nest egg in TFSAs but not now.

#88 Pete from St. Cesaire on 04.29.17 at 11:30 pm

Yes every man remembers being a boy and coming of age: noticing those sensuous curves, exotic smells. How they felt in your hand.
Of course I’m talking about cars.
—————————————————
Yeah, those were the days. Nowadays even a Rolls just looks like a big Honda. You can’t even tell the make of a car unless you see the name or logo.

#89 Vancouver Troy on 04.29.17 at 11:56 pm

I must be slow…

If you have a portfolio returning 6% a year and you withdraw 6% a year, wouldn’t it last indefinitely?

Why would you run out of money in 26 years?

#90 Fortune500 on 04.30.17 at 12:13 am

Thank you for this post Ryan. Personally, I am planning on using a lower withdrawal rate and an earlier than normal retirement (hopefully), but I am also not planning on any OAS for my generation. If it is there then great.

Anyways, what is your opinion on varying your withdrawal rate in retirement? For example, if someone executed their plan in 2007, it might have been prudent to adjust to a lower withdrawal rate (assuming one could afford to) and then ramp back up once the ‘black swan-like’ event was over or it was clear that things were not about to stay that way forever.

I imagine someone who was able to use a 3 or 3.5% withdrawal rate over the first few years of recovery would have been in a much better position than someone who, do to their budget, absolutely had to take out the full 4 or 5% no matter what, even during the worst of the downturn.

#91 Ponzius Pilatus on 04.30.17 at 12:34 am

The problem is Canadians have no Life beyond RE and stock addiction.
Joshua just beat Klutchenko in Wembley before 90,000 spectators.
The Europeans know how to have a good time.
What do you do in your spare time, Mr. Lewenza?

#92 jas on 04.30.17 at 1:37 am

#41 NOTHING SURPRISES
#48 Fred

Both of you have mentioned very good points.

My thoughts on having your own portfolio of $100,000 spread among 20 blue chip stocks will cost you only 0.4% or less even if you re-balance all 20 stocks because online cost of one trade of buying/selling transaction is $10 or less. And I am of the view that $100,000 spread across 20 blue chip stocks provides sufficient diversification.

#93 Norman on 04.30.17 at 2:10 am

I liked this post Ryan. Thanks. One question though… with a 6% return and 2% inflation, you’re clearing 4% per year. If you then withdraw 4% a year, shouldn’t your money last forever because your income would match your outflow? Maybe the software limits out at 50 years. Just asking in case there is something i’m not understanding.

#94 Mark on 04.30.17 at 2:18 am

“Rates aren’t going up in a hurry

You’re absolutely right. BoC policy target rates, GoC bond rates are not going up in a hurry. They’re probably heading down even further, especially in light of the unfolding crisis in Canadian mortgage finance.

However, this does not mean that retail mortgage rates are going down. Far from it. Risk in the mortgage market is exploding. More risk requires more compensation to the lenders with respect to that risk. If the BoC cuts another 25bp at the next meeting, it seems very likely to me that the banks won’t even bother reducing the “Prime” rate. The BoC is likely to reduce to ZIRP, and even need to institute QE to combat the deflation in the Canadian economy due to the collapsing housing sector.

#95 Time Left on Planet on 04.30.17 at 4:15 am

In the end, it’s always about how much longer will you be on the planet and thus, years you have to fund in retirement.

Well, here is an actuarial site that uses age, BMI and smoking status to help you answer that age old question:

http://deathclock.com/

#96 James MF on 04.30.17 at 6:09 am

“We expect more from readers. It’s been stated numerous times here that the 40% fixed income allocation in my suggested balanced portfolio is not bonds. — Garth”

I was going to ask about this but figured I’d skim the comments to see if clarification was provided. Thanks, Garth!

Also, for those who haven’t been reading:

http://www.greaterfool.ca/2014/09/05/the-fork/

http://www.greaterfool.ca/2014/03/31/real-men-invest/

http://www.greaterfool.ca/2014/05/15/the-millennial-portfolio/

#97 Dobermanduke on 04.30.17 at 7:40 am

#59 Leo Trollstoy

My 68 yo friend owns 4 12 unit multi family. All paid off for almost 20 yrs now. He doesnt care about this stuff

——————————————————————-

Maybe not but with 48 tenants I guarantee he has more than his share of headaches and losses along the way

#98 Cto on 04.30.17 at 7:49 am

So I’ve been hearing a lot of Americans say that the housing markets going crazy in their City. Portland Seattle Los Angeles East Coast cities.
What the hell is wrong with the fed and Janet Yellen?
This is a sure sign that they should be raising rates at least quarterly.
She’s flirting with the same situation they had 10 years ago.
She needs to do it and do it now before another bubble is created as States and wreak havoc.
By this point though it seems there’s some other underlying factor causing them to keep rates low some sort of conspiracy. Maybe the national debt?

#99 Cto on 04.30.17 at 7:50 am

Is the American government lobbying behind the scenes and blocking the Fed from doing what they should be doing??? Does anyone have any comments or can Enlighten us?

#100 Cto on 04.30.17 at 7:56 am

92 mark
Rates are going up in a hurry”

The Central Bank may be dropping rates but that won’t make the banks drop. Right.

This historically over the last five years would have been a much much better scenario for Canada if the bank rates for not affected by the central bank lowering.

However mortgage rates followed the central bank’s lawyerings which was catastrophic to the real estate bubble.
Business investment was relatively negligible…

#101 Another Deckchair on 04.30.17 at 8:10 am

@Penny Henny;

My partner and I have been keeping detailed spending records for quite a while now.

What’s instructive, is to compare the expenses with those from the “Financial Facelift” columns in newspapers – we’ve come to the conclusion that most (if not all) people who write in have NO CLUE as to where their money goes.

Now, when we started, we sat down and made up an estimate of where we THOUGHT our money was going. We still have it and laugh about how far off in some categories we were.

Nothing like having actual figures, and (goes without saying) honesty about where every $ goes. No finger pointing, no “you spent WHAT!” comments – it needs understanding and trust to do this exercise, which few couples likely have.

#102 FLHTK on 04.30.17 at 8:23 am

Todays was a good blog Really enjoyed reading it

#103 Ryan Lewenza on 04.30.17 at 8:31 am

Question, Period “60/40 seems very dangerous, exposed heavily in equities; a 2008 would change the game. How would you protect the client ? Selling capital at a low to put food on the Table is not ideal. Leave at least 1 yr expenses in a no risk vehicle?”

First we take an active and disciplined approach. We would be reducing risk in portfolios as conditions worsen. The 60/40 is the strategic or long term asset mix. We then tactically adjust the asset mix as conditions change. For example we could reduce the asset mix to say 50/50 as the economy and stock market roll over. Also we always have a 5% weight in cash so we can draw on that. Finally that was a one in a 100 years event with the market back to its highs a few years later. The 60/40 dropped 20% during this period (much less than the 55% drop in equities) and had recovered all it losses within 18 months. The benefits of including bonds in portfolios. – Ryan L

#104 Ryan Lewenza on 04.30.17 at 8:35 am

Lulu “With 100k spare to spend, what is your best suggestion? Mr Ryan Lewenza”

Build a globally diversified portfolio using low cost ETFs with a 60/40 asset mix. Include a good weighting to preferred shares which should continue to rally as interest rates rise. Overweight US, Europe and emerging markets equities. I also see good value in the beaten down energy stocks. – Ryan L

#105 Ryan Lewenza on 04.30.17 at 8:40 am

A Yank in BC “Ryan.. what about heirs? A 5% withdrawal rate over 30 years will deplete a portfolio to nothing.. or close to it.”

Yes good question and Doug and I discussed including a comment about this in the blog post. I should have. So if you want to ensure you leave a legacy you would have to use a lower withdrawal rate closer to 4%. Or if there is a home then this could always be left to the kids. – Ryan L

#106 Ryan Lewenza on 04.30.17 at 8:44 am

Norman “I liked this post Ryan. Thanks. One question though… with a 6% return and 2% inflation, you’re clearing 4% per year. If you then withdraw 4% a year, shouldn’t your money last forever because your income would match your outflow? Maybe the software limits out at 50 years. Just asking in case there is something i’m not understanding.”

You’re 100% correct. Our software maximizes the years at 50 years. If you earn 4% after inflation and take out 4% the portfolio would last forever. – Ryan L

#107 Grey Dog on 04.30.17 at 8:49 am

Thanks Ryan,
As my husband is turning 65 this year, he has just retired this last month. You provided a wonderful summary. A couple guides I can recommend besides retirement ones already listed:
Daryl Diamond, Your Retirement Income Blueprint.
Desjardin Retirement Calculator

People who believe they can work til they are 70 are not dealing with reality.

Advice to younger blog pups, LIVE BELOW YOUR MEANS, max out RRSPs, TFSAs, plus get your Non Registered Account growing for those rainy day purchases you want to make when you do hit retirement.

Right now we are trying to decide when to start taking CPP. Hubby has a nonindexed pension, the CPP delay gives him something that is indexed in retirement.

#108 I'm stupid on 04.30.17 at 9:01 am

#50 Nonpulse

Stop embarrassing yourself, you don’t know what you’re talking about.

Let’s look at teachers and their platinum pension.

Max salary $94k – 10% of that salary is contributed to their pension plan. If you saved and invested 10% of your salary your entire working career you’d be able to retire after 30 years of service.

If you need to blame someone for your failures just pick up a mirror and stare into it. Until you take responsibility for your own mistakes you’ll continue to make the same mistakes.

#109 NoName on 04.30.17 at 9:03 am

Oh you blog dogs, noone is paying any any attention, portfolio this allocation that, let me tell you something its all abut standard deviation, and div. distribution weighted average. Put this on a fridge!!!

So basically it boils down to, if I could feed a portfolio steady and increased feeding in down years I would not care abut volatility, if anything I would embrace it, hockey stick growth guarantid.

But me beeing working stif, that find my self with out of work every so meny years, generaly (almost guaranteed) in down market I need that std. dev. as small as you can get, eaisier sad than done.

So what I want is:
ARK
Accuracy Repetition Consistency – take lots of effort

NOT

PRC (sounds communist, is’n it)
Precision Repetition Consistency – not achievable (brny rigs a bell)

@fliop

Nothing wrong with voting NDP, if everyone voted NDP in On. last elections i am almost certain that we (Ontario) would in better position than it is, me thinks. Unfortunately i was one of those few who voted for timmy whoodat last time, putting x in circle beside cons candidate was instant regret… back than i didnt knew why i feeled regret, now i know…

#110 traderJim on 04.30.17 at 9:03 am

When I lived in the Beach my neighbours were a nice young couple who had inherited a 4-plex, and were smart enough to not only keep it, but to buy another one when the market was bad around 1994. They paid about the same as I did, around $500k for an entire 4-plex.

A few years later they bought another one.

Each of those now sell for between $2m and $3m (depending on location, if basement apartments, renovated, etc.)

So this young couple are now easily worth $6m to $10m, and their only work for the last 20 years was managing the rentals, in a location where people line up when a place becomes available.

Not bad.

#111 I'm stupid on 04.30.17 at 9:07 am

#91 Norman

#87 Vancouver Troy

Inflation adjusted, so your drawdown increases every year to account for inflation so you’ll have the same purchasing power.

#112 Ray Skunk on 04.30.17 at 9:13 am

#87

If you have a portfolio returning 6% a year and you withdraw 6% a year, wouldn’t it last indefinitely?

No.
Imagine your portfolio is $100. Return of 6% gives you $106 after a year.

Withdraw 6% from $106 ($6.36) and you end up with $99.64.

Your portfolio decreases over time.

#113 Ryan Lewenza on 04.30.17 at 9:29 am

Vancouver Troy “I must be slow…If you have a portfolio returning 6% a year and you withdraw 6% a year, wouldn’t it last indefinitely? Why would you run out of money in 26 years?”

In nominal terms yes but not in real terms. You have to include inflation since money earned in 10 years from today is not the same as today. So you subtract inflation from the return rate to determine the withdrawal rate. – Ryan L

#114 I'm stupid on 04.30.17 at 9:36 am

Why can’t people think? I was reading an article talking about Uber and self driving cars. Uber’s goal is to have a fleet of autonomous vehicles so they can make a bundle. Only one problem with that… if the cars drive themselves why wouldn’t I just buy my own and let it drive around the city picking people up and dropping them off while I’m at work then pick me up after work? I assume it’s electric also since we’re dealing with unicorns and pixie dust.

The largest cost in transportation is the guy driving. Without him you could triple the fleet at no extra cost. That’s 3 times the service with the current cost structure.

I assume if autonomous cars are a reality someone can develop a way to summon the cars and a pay system.

#115 traderJim on 04.30.17 at 9:43 am

Not enough talk about President Trump here.

How’d those vote recounts go?
How about that electoral college thing?
Impeachment right on track?
Russia still manipulating votes?
Stock market crashed?

And most important of all, is it Trumpocalypse yet? Hope we don’t have to wait 8 years for that. Waiting that long for the housing crash has been painful enough.

#116 $100 on 04.30.17 at 10:28 am

#110 Ray Skunk on 04.30.17 at 9:13 am

#87

If you have a portfolio returning 6% a year and you withdraw 6% a year, wouldn’t it last indefinitely?

No.
Imagine your portfolio is $100. Return of 6% gives you $106 after a year.

Withdraw 6% from $106 ($6.36) and you end up with $99.64.

Your portfolio decreases over time.

More importantly the purchasing value of $100 is very different in ten-twenty-thirty years from now. Regardless of CAD, USD, EU.

Worst part of it, is that you have zero power over it.
One way governments can deal with debt is inflating money. CAD is a great example.

#117 crowdedelevatorfartz on 04.30.17 at 10:29 am

@#79 Flopster
“Hey Crowdie ,it’s a pity you don’t live in my riding….”
*******

I’m up in North Burnaby, Steve Darling( former Global TV newsreader) is running for the Liberals. I have no idea who’s running for the other parties.
He’s was punted from Global tv last Fall and wasted no time in announcing his candidacy.
No conflict there.
Like all the other TV and Radio personalities that have been cut and immediately take a job with the liberal govt.
Bad form for the appearance of journalistic objectivity and “job hopping” like that should be banned for at least one year.
I ran into him at the Kensington mall yesterday and when he asked for my vote I said, “I’m sorry but there is no way I will vote for another 4 years of Christy Clark”.
He nodded and moved on.
Seemed like it wasnt the first time he heard that.
She’s political poison.
I’m not sure what he’ll do if he isnt elected and the Liberals go down in flames because he wasnt very good at tv.

#118 NoName on 04.30.17 at 10:31 am

addendum to my previous post

i dont know how accurate is MC, because my excel didnt have formula what guy on youtube sad to use so i used what i tought would be best alternative. that i got from another guys on youtube. so what i am saying is that i am completely wrong or there are some chances to be somewhat acurate.

chart note
dotted line (one with lots of minuses)
total deposits
red line probability that will be more than than
line above 95%
line above red 90% and so on 85, 80, 70… or something like that. red line is only one that matter to me, all other lines are just bonus.

STD
18%
http://imgur.com/a/wtAH5
12%
http://imgur.com/a/ReamD
09%
http://imgur.com/a/lpN6w

#119 NoName on 04.30.17 at 10:33 am

#112 I’m stupid on 04.30.17 at 9:36 am

“Only one problem with that… if the cars drive themselves why wouldn’t I just buy my own and let it drive around the city picking people up and dropping them off while I’m at work then pick me up after work?”

For same reason why could be caby until recently (uber disrupted that monopoly).

#120 Da goodbye Goil on 04.30.17 at 10:41 am

Ohoh boys…….be on your best behaviour…..or else!

https://www.thestar.com/business/wealth/2017/04/30/when-to-break-up-with-your-advisor-and-how-to-do-it.html

#121 cropgrower on 04.30.17 at 10:55 am

retirement = Malcolm Hamilton….I likes this guy, it’s what he studied his whole career.

#122 Doug in London on 04.30.17 at 11:04 am

@conan, post #85:
Even if you have only 20% of your portfolio in bonds, if you cash part of or all of it in and buy equities when they are on sale you’re still ahead of the game. Quite frankly I don’t remember what the mix I had was in 2001-3 or 2008-09, but recall in 2005 to early 2008 gradually cashing equity funds and buying bond funds, increasing the percentage in fixed income. Why? I saw the fear of equities had largely disappeared and this feeling was prevalent that we entered a new age where prosperity would go on forever and ever and recessions were a thing of the past. That was a sign of a time to take a more defensive stance. We’re not there yet, but during this economic cycle if the same mentality is present I’ll increase my holdings of fixed income ETFs. Yes, that would exclude preferred share ETFs.

#123 For those about to flop... on 04.30.17 at 11:27 am

Hey WULLY, I hope giving $20 to the Red Cross on our behalf causes you no long term pain ,but it was the right thing to do.

You made a rookie mistake by picking a rebuilding team against the team I expect to win the whole thing later this year and so now probably a wise move to check in on the Triple Crown…

——————————————

Hey NoName ,yes it is surprising to me me that my first ever vote in Canada was for the NDP.

I was going to vote Conservative in the last Federal election with the dream of saving the TFSA and Harper retiring a year or so in but that never happened.

I attribute me voting yesterday to this blog, I am trying to become a more involved citizen and although my riding is already NDP and will likely remain that way for a while I thought I should break my duck anyway.

Crowdie is right, we need a reset here in B.C and if four years of NDP and then another decade of Liberals achieves this then what else can the man in the streets do?

My ridings sitting member is a lady of Filipino descent and the challenger who goes by “East Van Chan” is a lady of Chinese descent and the Greens have a Caucasian male.

So what you’ve basically got is two Asian chicks giving a good old fashioned spanking to a guy named Mr Rear.

I wasn’t going to miss out on that…

M42BC

http://globalnews.ca/news/3383430/b-c-election-2017-vancouver-kensington-riding/

#124 Ponzius Pilatus on 04.30.17 at 11:40 am

#115 crowdedelevatorfartz on 04.30.17 at 10:29 am
@#79 Flopster
“Hey Crowdie ,it’s a pity you don’t live in my riding….”
*******

I’m up in North Burnaby, Steve Darling( former Global TV newsreader) is running for the Liberals. I have no idea who’s running for the other parties.
He’s was punted from Global tv last Fall and wasted no time in announcing his candidacy.
No conflict there.
Like all the other TV and Radio personalities that have been cut and immediately take a job with the liberal govt.
Bad form for the appearance of journalistic objectivity and “job hopping” like that should be banned for at least one year.
I ran into him at the Kensington mall yesterday and when he asked for my vote I said, “I’m sorry but there is no way I will vote for another 4 years of Christy Clark”.
He nodded and moved on.
Seemed like it wasnt the first time he heard that.
She’s political poison.
I’m not sure what he’ll do if he isnt elected and the Liberals go down in flames because he wasnt very good at tv.
—————–
No-brainer.
He’ll follow Clark back to CKNW.
The Clark and Darling show.
From midnite to 5, when McComb takes over.

#125 A Reply to #113 traderJim on 04.30.17 at 11:42 am

#35 Ryan Lewenza on 04.29.17 at 6:11 pm

Refer to the above comment!

#126 maxx on 04.30.17 at 11:44 am

“In 2008 a balanced portfolio lost 20% and recovered in one year, then advanced 17% the next year. Average annual return over the three years of the crisis – 5%. How is that so hard to survive? — Garth”

Ssssstttttrrrrreeeeesssss!

Were I a younger investor, I’d consider your firm. I like the approach, the conservatism and consistency. The knowledge base is excellent, perhaps better than any I’ve witnessed. Plus, you’re a great man Garth.

I’ve seen so many people (family and friends) lose a lot of money to crap firms. Nearly every bank or private advisor now leaves me unconvinced and cold. My view is jaundiced- I am a casualty of others’ bad (and life-changing) experiences. I’ve seen a couple of my friends age too rapidly and lose years of good health due to loss of wealth. At a waaaay wrong time of life.

I wish it were otherwise. I know there are huge numbers of people like me who are now at a place where they simply are no longer interested in risk. Or stress.

Only in good income and better sleep.

#127 punch lines on 04.30.17 at 11:50 am

#113 traderJim on 04.30.17 at 9:43 am

Not enough talk about President Trump here.

How’d those vote recounts go?
How about that electoral college thing?
Impeachment right on track?
Russia still manipulating votes?
Stock market crashed?

And most important of all, is it Trumpocalypse yet? Hope we don’t have to wait 8 years for that. Waiting that long for the housing crash has been painful enough.

Turned out to be fake.

The hysteria is real.

Just like the rise of organized far left, violent terrorist gang: “antifa”.

https://www.youtube.com/watch?v=tGWBQTvjt7s

#128 For those about to flop... on 04.30.17 at 12:15 pm

Hey WULLY,are you trying to discreetly tell me in front of 18,487 lurkers that your surname is Fraser?

I looked at the riding and they have a “Wang “and a “Lee” as well.Which is a great pity.

Most people were hoping for a little bit of Wang Chung tonight…

M42BC

http://globalnews.ca/news/3383495/b-c-election-2017-vancouver-langara-riding/

#129 Big Dawg in Durham on 04.30.17 at 12:34 pm

Another way to see how long your stash will last is this website https://www.retirementadvisor.ca/retadv/apps/tools/tools.jsp

I’ve used it quite a bit. Gives a nice presentation of income , taxes and remaining assets at one glance. I like the “post retirement calculator ” in particular

#130 Gandalf on 04.30.17 at 12:51 pm

your analysis is flawed if you don’t account for sequence of returns and sequence of inflation risks are not considered. and forget Monte Carlo simulations, you need to look at actual market history over the past 100 years…

if someone starts drawing on their investments and experiences an unfavorable sequence of returns in the first couple of years of retirement it has a dramatic effect on the longevity of funds.

Then ensure you have a balanced and globally-diversified portfolio to add predictability and remove volatility. — Garth

#131 TurnerNation on 04.30.17 at 1:12 pm

Obligatory VeryBearish post.

We are in the very late stages of an advanced asset bubble. What will occur, the elites will crash the system now that we’re all indebted more, and scoop up assets for pennies.
They will sacrifice their own (see: Lehman, B.S.) but ultimately public funds – our money – will save the day.
Are we Hoooped with Home Crapital?
Big banks will be fine though might feign weakness, will emerge again with a vengance – and higher interest rate for all of us.
The profit cycle will continue on.

I’ve never seen so much consumption. And why not when your house gain $5-10k each month.
Everyone’s riding around in new (leased) German luxury cars but still wearing baseball caps, Tshirts, flipflops and yoga pants. Consumption class, riche.
Latest electronic gadgets; always vacations; overstuffed homes.
Super rich Kanadians.

Me? I just trade it as a hobbyist. Long live capital markets.

#132 Big Dawg in Durham on 04.30.17 at 1:18 pm

Hey Nick – Morningstar shows PIMCO Monthly income F series ( in the Global Fixed Income catefory ) returned 7.58% in 2016 ( after fees ) , did 2.8% in 2015, 7.05% in 2014 and 6.79% in 2013.

#133 Mishuko on 04.30.17 at 1:27 pm

I’m still waiting for the update to the porche :(

You getting the gt3 rs?

I think he meant ‘porch.’ Home Depot. — Garth

#134 yup on 04.30.17 at 1:33 pm

Hey Nick – Morningstar shows PIMCO Monthly income F series ( in the Global Fixed Income catefory ) returned 7.58% in 2016 ( after fees ) , did 2.8% in 2015, 7.05% in 2014 and 6.79% in 2013.

……..

i’m a proud owner.

5yr sharp ratio- 1.99 , off the charts…:)

#135 "collateral consquences" on 04.30.17 at 1:38 pm

Why the US government doesn’t prosecute even foreign banks committing crimes: “collateral consequences”.

https://youtu.be/2gK3s5j7PgA

#136 Shawn on 04.30.17 at 1:48 pm

Bonds are a great way to lose money (when compared to inflation) over time. It’s likely that inflation will rise faster than bond yields over the next 20 years. If bond yields fall, inflation will probably fall less. It’s lose, lose. If you’re betting against the future getting better, buy bonds. If you’re betting on the future getting better, buy VFV.

#137 Long-Time Lurker on 04.30.17 at 1:55 pm

I found two good summaries of the U.S. 2008 housing market crash.

The first is “Subprime Crisis: A Timeline” by CNN Money.

http://money.cnn.com/2008/09/15/news/economy/subprime_timeline/

New Century Financial (USA) is the equivalent of Home Capital (CAN). This is the second event on the timeline.

April 2, 2007 – New Century Financial, one of the nation’s largest subprime mortgage lenders files for bankruptcy court protections, cutting 3,200 jobs, or 54% of its remaining work force that had already been scaled back in previous weeks as it stopped accepting new loans.

The other is “Subprime Mortgage Crisis” by The Federal Reserve History. This gives a good summary of the entire 2007-2010 U.S. housing crash.

What’s interesting to me here is the price acceleration up and down due to human psychology (greed/fear – herd mentality). Things could change in Canada a lot quicker than anyone expects.

https://www.federalreservehistory.org/essays/subprime_mortgage_crisis

Subprime Mortgage Crisis
2007–2010

The expansion of mortgages to high-risk borrowers, coupled with rising house prices, contributed to a period of turmoil in financial markets that lasted from 2007 to 2010.

#138 traderJim on 04.30.17 at 1:57 pm

#124 punch lines

‘The hysteria is real’.

I’m wondering if the post election hysteria is the first case of collective Munchausen syndrome? I can’t think of another example, although there was something like it when Reagan was elected (I recall the left screaming about nuclear war, and the real result was the wall coming down and the freeing of a couple hundred million people).

#139 NoName on 04.30.17 at 1:58 pm

@flop
Now that you mention spanking…

Beijing (CNN)Eight employees of a rural bank in China have been publicly spanked for poor performance.

http://www.cnn.com/2016/06/21/asia/china-bank-spanking/

#140 Cheap Houses on 04.30.17 at 2:47 pm

All these numbers are rubbish. By 2022 we will be in the middle of a global great depression.

#141 akashic records on 04.30.17 at 3:02 pm

Above the law ETF

I was skimming thought this breathtaking documentary and it gave me the idea of the Above the law ETF

#132 “collateral consequences” on 04.30.17 at 1:38 pm
Why the US government doesn’t prosecute even foreign banks committing crimes: “collateral consequences”.

https://youtu.be/2gK3s5j7PgA

The documentary explains and proves black and white that a cartel of international banks and their executives, employees are above the law, free of prosecution, even after they are no longer employed by the banks.

This is extraordinary, because even the US President does not have this immunity, R. Nixon had to be pardoned by G. Ford.

Would you agree, that a geographically diversified group of banks, who are free to break the law, because even they are caught, they are not criminally prosecuted, they pay a fee they negotiate for themselves – have an advantage on the market?

Would you agree, that they are safe – as long as the entire financial system melts down, in which case most of the generic EFTs crash and burn, as well?

Would it make the most sense then to build a core of your investment portfolio from a virtual ETF, that contains the shares of 29 banks (Europe, US, Asia), listed as “systemically important financial institutions” by the Financial Stability Board?

Other parts of your portfolio would include ETFs or asset classes that perform well when these above the law banks fail somehow.

#142 crowdedelevatorfartz on 04.30.17 at 3:15 pm

@#121 Flopster

I just finished voting.
Busy.
Apparently yesterday was a zoo at that Polling station.
A lineup out the door. People were waiting in the rain to vote.
Not sure what an early, big turnout means for the incumbent Liberals but my gut feeling is ….”toss the bums out”…..

#143 Atrate on 04.30.17 at 3:26 pm

It looks like sound advice, but do the percentges of withdrawal hold true for those who don’t have a million dollar portfolio?

#144 Thank you for the reply, Ryan on 04.30.17 at 3:37 pm

Question, Period “60/40 seems very dangerous, exposed heavily in equities; a 2008 would change the game. How would you protect the client ? Selling capital at a low to put food on the Table is not ideal. Leave at least 1 yr expenses in a no risk vehicle?”

First we take an active and disciplined approach. We would be reducing risk in portfolios as conditions worsen. The 60/40 is the strategic or long term asset mix. We then tactically adjust the asset mix as conditions change. For example we could reduce the asset mix to say 50/50 as the economy and stock market roll over. Also we always have a 5% weight in cash so we can draw on that. Finally that was a one in a 100 years event with the market back to its highs a few years later. The 60/40 dropped 20% during this period (much less than the 55% drop in equities) and had recovered all it losses within 18 months. The benefits of including bonds in portfolios. – Ryan L

……..

I understand more clearly now. Your firm has a tactical approach to asset allocation, rather than strategic (fixed allocations)

generating income from a portfolio to cover living expenses, intuitively is the goal. This way, even if a market correction does occur, capital is not touched. When lookign for a ‘retirement number’, this is my approach. It provides tremendous protection, flexibility. Unfortunately, because of today’s low yield environment it demands a higher retirement number. With that said, yield strategies are out there, such as ETF cover calls

these kinds of projections are very individualistic. Most will likely need a growth aspect, rely on capital gains as well as yield. This makes market returns for the pre-retirement and first 3-5 yrs post-retirement CRITICAL

again, thank you for taking the time on a Sunday to reply to my query. Have a great day!

#145 LP on 04.30.17 at 3:58 pm

#118 Da goodbye Goil on 04.30.17 at 10:41 am
Ohoh boys…….be on your best behaviour…..or else!

https://www.thestar.com/business/wealth/2017/04/30/when-to-break-up-with-your-advisor-and-how-to-do-it.html
****************************************
From the article that you linked…

You’ve outgrown your advisor: You started with your broker when your account was small and your needs were basic. Now you have achieved greater wealth, and you are not sure that your advisor has the experience and wisdom to guide you with a larger sum of money and the complexity that goes along with it.

If the account is doing so well, why on earth would one want to make a change? Even if you don’t actually like the adviser, one isn’t buying the personality only the expertise. In this case, dance with the one what brung ya!

#146 Doug in London on 04.30.17 at 4:06 pm

@maxx, post #123:
See my comments #75 and 120. When equities drop, rather than get stressed out about it, use that drop to cash in fixed income investments and buy equities while they are ON SALE. I understand Turner Investments does that, rebalancing to sell some equities when they are high, and buy more of them when low. Doesn’t seem at all stressful to me, and I’m 56 years old.

#147 Dan on 04.30.17 at 4:14 pm

Do not care about pension days. Russians will nuke you soon, no?

#148 Leo Trollstoy on 04.30.17 at 4:52 pm

#95 Dobermanduke on 04.30.17 at 7:40 am
Maybe not but with 48 tenants I guarantee he has more than his share of headaches and losses along the way

His property management company deals with that stuff. He says he’s too busy traveling to take care of tenants

#149 Leo Trollstoy on 04.30.17 at 4:55 pm

#108 traderJim on 04.30.17 at 9:03 am

Great post. And good on them.

Hard to beat paid off multi family buildings for lifetime cash flow

#150 WUL on 04.30.17 at 5:10 pm

Ryan:

If I may, and you will excuse the following. If people can peel their eyeballs from the Oilers / Ducks tilt in a couple hours in a few hours, their is a documentary on Discovery this evening about the Fort Mac fire as we approach the first anniversary in a couple of days. I I is on at 6:00 MDT. People mistakenly refer to it as the largest evac in Canadian history. It is not. The Mississauga rail derailment prompted an evac twice the size. ON outshines AB as usual.

I have made a note to self. It reads “Self, if you are triggered by rogue earth, refrain from bugging the Dawgs.” Thanks.

#151 Figure it out on 04.30.17 at 5:11 pm

Hooboy. If you earn 4% real every year, you can withdraw 4% real every year forever. If you earn AN AVERAGE of 4% real every year and wish to spend 4% real ever every year, then by necessity you will need to reinvest extra earnings in years you do better than 4% (“buy high”) and sell investments to make up the difference in underperforming years (“sell low”). That portfolio WON’T last forever.

Others here have tried to explain this using “sequence of returns” logic, but I guess that was too complicated.

Buy high, sell low = fail.

#152 CJBob on 04.30.17 at 5:49 pm

#151 Figure it out on 04.30.17 at 5:11 pm
Hooboy. If you earn 4% real every year, you can withdraw 4% real every year forever. If you earn AN AVERAGE of 4% real every year and wish to spend 4% real ever every year, then by necessity you will need to reinvest extra earnings in years you do better than 4% (“buy high”) and sell investments to make up the difference in underperforming years (“sell low”). That portfolio WON’T last forever.
______________
Finally someone who gets it, the other attempts had me banging my head against the wall. I’ve got to stop reading the comments but it’s like looking away from a car crash…

#153 Tony on 04.30.17 at 7:39 pm

Re: #146 Doug in London on 04.30.17 at 4:06 pm

You better hope the stock market stays rigged for a long, long time or you’ll be working for a long, long time into your nineties if you make it.

#154 Horatio Alger on 04.30.17 at 8:22 pm

#62 Paper routes — I also had two paper routes (in Windsor). I liked the Fiero and the Daytona. First LBO was buying the preacher’s son’s route who was afraid to collect. First FX trades were taking paper route money and arb’ing the Americans when I worked at a parking lot behind Joker’s.

#66 Ron re leveraged ETFs. Avg hold period is measured in seconds or minutes not even days let alone years.
Losses count more than gains. Don’t feel badly…..only fourfteen percent of the population can add fractions.

American who wants to buy ETFs — yes you can. Horizon’s HXS uses total return swaps and doesn’t count towards US property for estate tax. Distributions are rolled into NAV. Some counter party risk and a small swap fee but possibly worth it.

#155 Capt. Serious on 04.30.17 at 9:48 pm

This is too simplistic, but I suspect Ryan knows that and is dumbing it down for his audience. The sequence of returns matters, greatly, in determining the sustainable ongoing withdrawal rate. Draw a bad sequence early in retirement and you’re not going to be able to withdraw 5% for the remainder. Once shouldn’t worry about this too much because it’s largely out of your control (you’d have to take on an onerous savings rate to have absolute certainty), but it is a fact to be aware of.

#156 Doug in London on 04.30.17 at 11:09 pm

@Tony, post #153:
Yes, the stock market IS rigged, no doubt about that. It’s rigged so anyone who buys low and sells high, or just buys low and holds then sits back on their ass and lets the dividends roll in does just fine. I won’t be 90 years old for another 34 years and, while markets may go up and down, the long term trend is up, better than “investing” (if you stoop so low as to call that investing) in pathetic GICs. So what have YOU done with your money in the last 8 years? Have you been another wuss who was afraid of stock markets and let many years of good gains slip by you?

So, what have I been doing with these equity gains I’ve made? Recently, I was travelling around New Zealand and Australia, and have a story to tell about my travels. I was on the ferry from the South Island of NZ to Wellington, on the North Island. When the ferry was about 30 minutes from its destination of Wellington an announcement was made on the PA system. It said: all prepared foods (sandwiches, fries, dessert foods) are selling for $2 (about the same in CDN dollars). That’s a significant discount to regular prices. I was outside, enjoying the view, and ran fast inside to take advantage of this deal. By the time I got the cafeteria, there was a long lineup and everything was cleaned out! Wow, it seemed like a lot of passengers on that ferry like a good bargain. Maybe it’s just a New Zealand thing, but I thought everyone likes a bargain. Did I get that wrong? What I wonder is, why isn’t there the same amount of enthusiasm when stocks, bonds, ETFs, REITs, or other kinds of investments are on sale?

#157 Doug in London on 04.30.17 at 11:13 pm

Further to my above comment, as I’ve said here many, many, many, many, many, many, many, many, many, many, many, many times before, you should invest in a manner like a governor that gives the engine more fuel/air mixture when the speed is low and less when the speed is high. It’s so ridiculously simple.

#158 Stan on 05.01.17 at 3:25 am

Why isn’t the withdrawl amount going up each each by the inflation rate? The $40,000 in 50 years will be worth a lot less than today. That 2% inflation rate is alright as long as you don’t include food, rent, medical, dental, etc.

#159 Academic streaming harms black students: editorial – YFile on 05.01.17 at 5:06 pm

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