Hi all,
I've been tinkering with the TPAW retirement planning tool the last few days (it's really cool) and have a few questions -
1. I've been using a ~70/30 stock bonds asset allocation in the simulations (using default returns), which I believe uses a 20 year tip return of ~1.8%. It is fair to assume this is a real yield vs nominal (I realize TIPS are inflation adjusted but just making sure)?
2.When I use the 1/CAPE simulation, I need to get very aggressive on stocks but can't get to a 70/30 simulation. Why is this?
2. Given how high the CAPE has been, I've been sitting in a 50/50 stock/cash position with the cash in a 5% money market. I'm tempted to ride this portfolio for the next few years to see how low interest rates go and to see if we get another bout of inflation. For the time being is my cash delivering a similar yield as the 20 year TIPS simulation? I believe real yields are around 2.5 - 3%.
3. I'm open to moving to 70/30 stocks/cash and I'm curious how this would affect TPAW simulations? I want to be cash heavy as this would equal ~5 years of annual consumption budget and if I retire in the next year or so, this would hopefully get me through a bear market.
For additional context, I'm in my mid-forties and am thinking of retiring the middle of next year. We have a low-seven figure portfolio with 50% in after-tax (cash) & 50% in 401k (QQQ, S&P, Gold, Intl). My wife still works and plans to till she's in her mid 50s early 60s. We live in CA and have zero debt. Monthly budget is about $8500, which TPAW simulations have shown is feasible with our portfolio size. We have a couple kids (college savings is in a separate account). We also have about $50k in an HSA.
Lastly, I'm new the forum so if I'm breaking any etiquette please let me know!
Thanks so much!
I've been tinkering with the TPAW retirement planning tool the last few days (it's really cool) and have a few questions -
1. I've been using a ~70/30 stock bonds asset allocation in the simulations (using default returns), which I believe uses a 20 year tip return of ~1.8%. It is fair to assume this is a real yield vs nominal (I realize TIPS are inflation adjusted but just making sure)?
2.When I use the 1/CAPE simulation, I need to get very aggressive on stocks but can't get to a 70/30 simulation. Why is this?
2. Given how high the CAPE has been, I've been sitting in a 50/50 stock/cash position with the cash in a 5% money market. I'm tempted to ride this portfolio for the next few years to see how low interest rates go and to see if we get another bout of inflation. For the time being is my cash delivering a similar yield as the 20 year TIPS simulation? I believe real yields are around 2.5 - 3%.
3. I'm open to moving to 70/30 stocks/cash and I'm curious how this would affect TPAW simulations? I want to be cash heavy as this would equal ~5 years of annual consumption budget and if I retire in the next year or so, this would hopefully get me through a bear market.
For additional context, I'm in my mid-forties and am thinking of retiring the middle of next year. We have a low-seven figure portfolio with 50% in after-tax (cash) & 50% in 401k (QQQ, S&P, Gold, Intl). My wife still works and plans to till she's in her mid 50s early 60s. We live in CA and have zero debt. Monthly budget is about $8500, which TPAW simulations have shown is feasible with our portfolio size. We have a couple kids (college savings is in a separate account). We also have about $50k in an HSA.
Lastly, I'm new the forum so if I'm breaking any etiquette please let me know!
Thanks so much!
Statistics: Posted by mrshikadance — Sun Sep 15, 2024 1:55 pm — Replies 0 — Views 71