FYI: Studies show that the ability to perform simple math problems, as well as handling financial matters, are typically one of the first set of skills to decline in diseases of the mind, like Alzheimer’s.
Regards,
Ted
http://www.nytimes.com/2015/04/25/your-money/as-cognitivity-slips-financial-skills-are-often-the-first-to-go.html?ref=your-money

Hi Dex,
I did not follow your analyses in any detail, but I believe you are being far too pessimistic. A 30-year projected retirement is doable with less funds than your analyses suggest.
How do I know this? I did a few calculations using the Monte Carlo simulator that I referenced on this exchange. Please give it a try using your specific constraints. I believe it offers some hope for initial retirement portfolio values in the one-half to one million dollar range for a COLA adjusted withdrawal rate starting at $30,000 annually.
Using end of period portfolio survival probability as the success criteria, a one-half million dollar initial portfolio worth is only a coin flip likelihood. That’s not acceptable. But a one million dollar portfolio has a survival likelihood in excess of 90%. Those odds were estimated with a diversified portfolio with an average annual return of 8% and a standard deviation of 15%.
I did some what-if scenarios also. For the inadequate one-half million dollar portfolio, the survival likelihood odds can be incrementally improved by about 10% if a more aggressive equity portfolio is postulated, or if a portfolio with a reduction in standard deviation is assembled, or if a flexible drawdown strategy is practiced. Flexible meaning that COLA raises are held to zero for negative return years. These tactics can be individually deployed or used in concert.
My analyses were very incomplete and were done for illustrative purposes only.
Stay strong, all is not lost. And use the referenced Monte Carlo code.
Best Wishes.

i think we have at least 5 more years of this low interest rate environment. It could be more. The debt, aging population, unemployment, wage stagnation will help to keep it down.

I hope you prove prescient. I would be thrilled with just a year or two more of these low yields. But I sure haven't liked the action in TLT (20 year bond) since the bottom in yields around the beginning of February. I worry (I always worry) 2015 will be the reverse of 2014 the former being everyone was shocked how low rates fell with the latter everyone being shocked how quickly rates move back up. Time for the bank loan/floating rate funds?

i think we have at least 5 more years of this low interest rate environment. It could be more. The debt, aging population, unemployment, wage stagnation will help to keep it down.

http://www.sec.gov/Archives/edgar/data/709364/000094937715000158/e34519_isi-rvvrvpsupp.htm
497 1 e34519_isi-rvvrvpsupp.htm
The Royce Fund
Supplement to the Investment, Service, and Institutional Class Shares Prospectus Dated May 1, 2014
Royce Value Fund
Royce Value Plus Fund
On April 22, 2015, the Board of Trustees of The Royce Fund approved name changes and investment policy changes for the Funds listed above. All of these changes will take effect on May 1, 2015. The investment policies and operations of each Fund will not change except as specifically described below.
Royce Value Fund
Royce Value Fund will be renamed Royce Small-Cap Value Fund. The Fund will invest, under normal circumstances, at least 80% of its net assets in equity securities of companies with stock market capitalizations up to $3 billion.
Royce Value Plus Fund
Royce Value Plus Fund will be renamed Royce Smaller-Companies Growth Fund. The Fund will invest, under normal circumstances, at least 80% of its net assets in equity securities of companies with stock market capitalizations up to $7.5 billion.
April 28, 2015
RVV-RVP-ISI

Europe is at the epicenter of the global experiment with negative interest rates. Bonds trading with negative yields are commonplace there. But, even in the US, JP Morgan Chase will soon begin to charge certain customers a 1% per year fee on deposits. Is my idea that cash sets a floor on interest rates becoming outdated? How unstable are things becoming that I am even asking this question?
This topic is impacting my thinking about my portfolio. (Maybe my next annual portfolio review will find me adding more to my defensive allocation to “cash”.) If anyone has a properly functioning crystal ball I would appreciate some guidance concerning what the next couple of years holds for us!
Anyway, here is a fairly short BloomburgBusiness article about this topic:
bloomberg.com/news/articles/2015-04-23/negative-interest-rates-may-spark-existential-crisis-for-cash

I don't think anyone would recommend retiring with just 5 years of cash flow in the bank and $300,000 in other investments. So, let's use $1,000,000 as your goal plus the first 5 years with SS.
Interest rate 5%
Years 30
Starting amount $1,050,000
Future Value: $4,538,039.49
Interest rate 3.5% - same as expense growth rate
Years 30
Starting amount $1,050,000
Future Value: $2,947,133.39
So, give up the hope ...
Here is my 2016 cash flow
(29,500) Spending
152 Cash Back
222 Cecking/Int
28,920 Dividends/Interest
10,713 Money Market
13,814 Pension
24,321 Total

Here's an example:
$50,000 budget/ year
250,000 Spending
-000,000 Pension - you don't have one
-100,000 Social Security
-100,000 Dividends/Interest Apx 300,000 paying dividends/interest You have other $
= 50,000 withdraw from savings - 10,000 into money market, 40,000 into other
So you have:
300,000 paying dividends/interest
10,000 MM
40,000 other
$350,000 Total + your other money
250,000 Spending
-000,000 Pension - you don't have one
-000,000 Social Security - retire before eligible or not there for you
-100,000 Dividends/Interest Apx 300,000 paying dividends/interest You have other $
= 150,000 withdraw from savings - 30,000 into money market, 120,000 into other
So you have:
300,000 paying dividends/interest
30,000 MM
120,000 other
$450,000 Total + your other money
You don't say how old you are but let's assume you are 30.
BUDGET
Interest rate 3.5%
Years 30
Starting amount $50,000 - budget
Future Value: $140,339.69/Year
Dividend/Interest Income:
Interest rate 5%
Years 30
Starting amount $350,000
Future Value: $$1,512,679.83
http://www.investopedia.com/calculator/fvcal.aspx
So, at a minimum, if you get SS you need 1.5M in savings in 30 years.
If, you don't get SS you need $1,944,874.07

Do this exercise and let us know how it affect your retirement investment.
Line item budget for 5 years
- pension
- social security
- dividends
= amount to withdraw from investments (or deposit). Put 1 year of this in a money market account, the remainder in an interest bearing low risk investment.
This does 2 things
1 - when your investments are positive you can withdraw years 6,7... and deposit.
2 - when your investments are negative (market downturn) you have 5 years you don't have withdraw any money.

One of the Best (smart guys): Playing Defense
Similarly, the Yacktman Fund’s board sued its manager, Don Yacktman, in the late 1990s. According to the board, Yacktman didn’t adhere to the fund’s charter. He, like manager Steve Romick at FPA Crescent, avoided technology stocks. Yacktman won the case, kept his fund together, and went on to be proven right about avoiding technology stocks. Yacktman Focused’s 15-year record is the best of the bunch, bumping up against 13% annualized.

Hi Guys,
Yesterday, in response to the MFO exchange on younger folks retiring comfortably-not, I recommended a Monte Carlo simulator from MoneyChimp to add to your retirement planning toolkit. I made that recommendation mostly because of its simplified input format. It has limitations.
Upon reflection, I recalled an alternative that also is rather simple to input, and offers its users a wider range of study options. The simulator was assembled by the Flexible Retirement Planner website. You might want to explore its many fine features. Here is the Link to it:
http://www.flexibleretirementplanner.com/wp/planner-launch-page/
It is much more comprehensive than the MoneyChimp version, yet takes only a few minutes to complete the requisite inputs. Enjoy.
Since I hadn’t run the code for quite some time, I did a few practice calculations.
For the 30 year retirement timeframe that I tested, it is not surprising that when I decreased portfolio volatility for an all equity portfolio from 20% annually to a 15% level, without substantially decreasing average annual returns (that’s almost plausible), 30-year portfolio survival rate for a 4% annual drawdown schedule increased from an unattractive 79% to a largely more acceptable 92% likelihood.
If bond-like returns of 5% (with standard deviation of 5%) are postulated for the portfolio with the same 4% drawdown schedule, the portfolio survival rate drops back to an uncomfortable 77%survival probability. This result reinforces the current financial advisor recommendation to keep a substantial fraction of a retirement portfolio in equity positions.
These are examples of the what-if analyses that Monte Carlo codes permit. The 3 illustrates that I reported took less than 5 minutes to input and to calculate completely. These types of analyses are almost too much fun. Please give it a try.
Best Regards.

I continue to have a positive long-term view on China, but the move is more than a little concerning, as well as how retail-driven it appears to be.
http://www.zerohedge.com/news/2015-04-28/wtf-chart-day-over-4-million-new-chinese-trading-accounts-opened-last-week

I sold this fund about four years ago due to concerns about rising interest rates. Silly me! This retiree could fashion a fairly simple "all weather, total return retirement portfolio" I would be comfortable with by combining VWIAX with BERIX, FPACX, SGENX, and RPHYX (those 4 are in my present portfolio). RPHYX would hold enough to see me through about 15 months of planned withdrawals. My brokerage account always also has at least enough cash to take care of my next planned quarterly withdrawal.

Oh goody. We've gone from the four food groups (a 1-dimensional representation) to a food pyramid (2-dimensional). In investing, from stocks/bonds/cash (1-dimensional) to style boxes (2-dimensional). Now let's go to 3D; can HD be far behind?
Seriously, what M* is talking about is nothing new. It looks like they're just seeing a market opportunity, since robo-advisors seem to have made paying for advice (good or bad) more fashionable.
Don't invest your 401(k) in company stock? Enron? WorldCom? Hello? On the other hand, there are tax benefits for doing so (net unrealized appreciation). How do you balance these factors?
Don't invest in your company industry (the example given was real estate for a realtor). Sure, and thousands of articles have been written on this. During the dot com bubble, I was in a tech company where the HR person told me that people were pouring money into American Century Ultra (TWCUX). That was the closest we had to a tech fund.
On the other hand, isn't the adage (attributed to Peter Lynch) "invest in what you know"? Again, a balancing act.
So M* may get into the financial planning business, piggybacking on a couple of trends - robo advisors and big data. Sounds hot, sounds now. (IMHO there really is potential here, but one has to be skeptical about the timing, for something that could have been done years ago, but less easily marketed.)

FYI: Apple Inc. should give a bit of a lift to the Dow on Tuesday.
Regards,
Ted
http://blogs.wsj.com/moneybeat/2015/04/28/morning-moneybeat-watch-what-apple-does-to-the-dow/tab/print/
Current Futures:
http://finviz.com/futures.ashx

FYI: The six year bull run in U.S. stocks has caused some value funds to stash some of their portfolios in cash.
While this has crimped their short-term performance, the funds’ long-term results remain robust. Such good long-term performance should inspire confidence in the managers, given the current market conditions.
Regards,
Ted
http://www.marketwatch.com/story/5-stock-funds-youll-want-to-own-in-the-next-bear-market-2015-04-27/print

If you’re not already paying attention to China, you should start now.
So far this year, Dow Jones and S&P 500 have continued their run, and kept US investors comfortable with domestic equity markets. In sticking with what they know, investors have overlooked many of the biggest storylines from the past 12 months. China is one of those stories.
Once considered a highly volatile and generally undesirable emerging market due to excessive government intervention and lack of transparency, Chinese equities have recently gone on a tear. Given the country’s consistent growth rate, emerging middle class, and aggressive global expansion, it has become clear that China is a real investment opportunity that might have finally graduated into a “must own” for many diversified investors.
http://www.forbes.com/sites/duncanrolph/2015/04/27/chinese-equity-markets-bubble-or-beast/print/

FYI: If you have criticisms of the Morningstar style box, you're not alone.
Morningstar Inc. does, too.
Regards,
Ted
http://www.investmentnews.com/article/20150427/FREE/150429922?template=printart

FYI: Investors that take a natural interest in the art of investing prefer to dedicate their time to being well-informed of new cutting edge investment themes, emerging trends, and economic prospects. But what about the retirement investor that doesn't have the predisposition for spending hours in front of a computer screen, researching and debating these important issues?
Regards,
Ted
http://www.marketwatch.com/story/the-one-fund-lazy-retirement-income-portfolio-2015-04-28/print
M* Snapshot Of VWIAX: http://www.morningstar.com/funds/XNAS/VWIAX/quote.html
Lipper Snapshot Of VWIAX: http://www.marketwatch.com/investing/fund/vwiax
VWIAX /VWINX Is Ranked #4 In The (CA) Funds Category By U.S. News & World Report:
http://money.usnews.com/funds/mutual-funds/conservative-allocation/vanguard-wellesley®-income-fund/vwinx

Total Stock market up 4%+ in 4 months (2015), and your worrying about Animals Dying?
Enjoy the money....