- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Retirement planning, what's reasonable expectation for portfolio return
Posted on 2/18/14 at 1:47 pm
Posted on 2/18/14 at 1:47 pm
Spinoff from the what's your number thread.
What is a reasonable expectation for portfolio return in planning a retirement account.
Let's assume someone has a particular retirement income target. Their retirement is entirely predicated on hitting a portfolio value that would reliably generate income at the target amount without planned portfolio depletion. How large would you recommend they grow their portfolio relative to target income.
What is a reasonable expectation for portfolio return in planning a retirement account.
Let's assume someone has a particular retirement income target. Their retirement is entirely predicated on hitting a portfolio value that would reliably generate income at the target amount without planned portfolio depletion. How large would you recommend they grow their portfolio relative to target income.
3
Posted on 2/18/14 at 1:52 pm to NC_Tigah
How long are we talking? Reasonable return over 20 years? 30 years? 40 years?
Posted on 2/18/14 at 1:57 pm to NC_Tigah
If it were 3/15/2009 I would say quite high, today significantly lower. I will try to post later as I have to run, but it is also highly dependent on what market exposure/asset classes one's portfolio is exposed to, etc. As far as my current retirement assets I go with roughly 2% real for conservatism.
Posted on 2/18/14 at 2:06 pm to GoCrazyAuburn
quote:Long term, non-portfolio-depleting (de facto income-producing), at least by intent. So, all of the above, 20-40yrs. Obviously the market fluctuates. The portfolio could take unexpected hits, but stable within reason.
How long are we talking? Reasonable return over 20 years? 30 years? 40 years?
Posted on 2/18/14 at 2:10 pm to tirebiter
quote:Yep.
If it were 3/15/2009 I would say quite high, today significantly lower.
Market returns through 2011
• 5 years: 1.3%
• 10 years: 2.0%
• 20 years: 7.9%
• 30 years: 10.5%
• 40 years: 9.8%
• 50 years: 9.2%
Posted on 2/18/14 at 2:17 pm to NC_Tigah
Also, what I expect to get, and what I plan on getting as far as planning purposes go is a bit different. Meaning, I'm going to plan on getting 5-6% post tax return and set aside enough for that to get me to my retirement number. However, I'm expecting to get 8-10% over a 30-40 year period.
Posted on 2/18/14 at 2:20 pm to GoCrazyAuburn
6% post tax
Posted on 2/18/14 at 9:23 pm to NC_Tigah
quote:
Market returns through 2011
Which market? Wilshire 5000? Dow? S&P? Nikkei? FTSE?
Posted on 2/18/14 at 9:29 pm to foshizzle
And to answer the OP, I don't have an expectation for portfolio return. The market giveth and taketh away year over year. My strategy is really very simple and takes little time:
1) Max my Roth, 401 and HSA.
2) Invest in a range of index funds covering US, Euro, Asian (not just Japan or China) and "emerging market" funds. Equity and bonds. Where possible, a non-dollar denominated fund although that's rare.
What I've found is that my returns are about average but fluctuate less than average - which is exactly what one would expect from such an approach.
1) Max my Roth, 401 and HSA.
2) Invest in a range of index funds covering US, Euro, Asian (not just Japan or China) and "emerging market" funds. Equity and bonds. Where possible, a non-dollar denominated fund although that's rare.
What I've found is that my returns are about average but fluctuate less than average - which is exactly what one would expect from such an approach.
Posted on 2/18/14 at 10:38 pm to foshizzle
quote:Right. Solid info.
And to answer the OP, I don't have an expectation for portfolio return. The market giveth and taketh away year over year. My strategy is really very simple and takes little time:
1) Max my Roth, 401 and HSA.
2) Invest in a range of index funds covering US, Euro, Asian (not just Japan or China) and "emerging market" funds. Equity and bonds. Where possible, a non-dollar denominated fund although that's rare.
What I've found is that my returns are about average but fluctuate less than average - which is exactly what one would expect from such an approach.
But the question was more driven by the "what's your number" thread. E.g., not so much based on investment strategy growing a portfolio, but rather size of the portfolio necessary to reliably generate income once it is mature in retirement.
A client comes to you and says his retirement income target is $100K/yr. He wants to retire early and he's aggressively funding his accounts toward that end. At what point is it reasonable for him to quit his job? Reasonable ROI estimate/Portfolio size?
Posted on 2/19/14 at 12:01 am to NC_Tigah
quote:
He wants to retire early and he's aggressively funding his accounts toward that end. At what point is it reasonable for him to quit his job?
A very fair question but I would turn that around by asking why he isn't aiming for a second career that keeps him happy? Retirement doesn't mean you have to watch TV all day.
Posted on 2/19/14 at 12:10 am to foshizzle
quote:Second career involves full time charity.
A very fair question but I would turn that around by asking why he isn't aiming for a second career that keeps him happy? Retirement doesn't mean you have to watch TV all day.
Posted on 2/19/14 at 12:21 am to NC_Tigah
quote:
Second career involves full time charity.
Actually, one can make a pretty decent income at charity work.
Posted on 2/19/14 at 11:03 am to NC_Tigah
quote:
And to answer the OP, I don't have an expectation for portfolio return. The market giveth and taketh away year over year. My strategy is really very simple and takes little time:
Agree as not having an expectation as to building a portfolio.
I use 5% as a rule of thumb. If I want $100,000 per year then I need $2,000,000 in retirement investments that yield 5%. Over the years I’ve seen where advisors and studies have pulled back from 7% down to 4%.
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News