Never got the usefulness of Grids and Charts, since my Econ. 101 professor in 1966 use to Draw them for hours on his blackboards (remember them), I used to ask him to give us his point(s) in plain English...so much to his dis-may....He probably is still doing (drawing) them and I graduated to the "real world"....

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.)

I'm not sure why the author recommended the Sequoia fund, since its been closed since Dec., 2013.

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

Dex you said "For you younger people hoping to retire comfortably - give up the dream." I'm saying that people will find a way. It may not be your way or my way but they will find a way.

I think you mean "Love Will Find a Way" by Yes in 1987.

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

Thanks Dex. Very instructive. Wonder how long you've operated on this budget?

I own my home (no mortgage), truck and travel trailer, single (no debt). I retired in '07 at 51 and since then I averaged $27,000 in spending - that includes health ins and taxes. I'm estimating I will spend an average of $38,000 (includes $30,000 for a new truck) from '16-25.
I did a line item budget for this period. After '25 I grow expenses at 4%

I think we are very similar. I broke it down into basic and incremental. Basic, is just staying home and incremental is travel and discretionary.

Thanks Dex. Very instructive. Wonder how long you've operated on this budget? Ours is set up a little differently and has not failed us over the 20+ years since we developed it.
Three areas:
1. Anticipated Income (for the year)
2. Recurring monthly expenses*(X12)
3. Major itemized expenses
*For #2 we throw in a monthly sum called "pocket money." Covers everything we don't care to log every time we buy it: gas, food, entertainment, incidental purchases, etc. Would drive you nuts trying to log such frequent small outlays.
#3 is a list of things that are large, but paid-out less frequently. Includes vacations, heating fuel, clothing, taxes, home improvements, auto repair, etc. Also a few K in an emergency or reserve fund. I keep a separate page in the budget book for each of these major areas and faithfully record every expenditure. Amounts allocated to some areas, like auto repair, are best-guess estimates.
We maintain an ongoing fund for area #3 by dividing the total amount by 12 and making monthly deposits in that amount into a separate checking account. Wouldn't have to be a separate account. One could work that out on paper. But, running a separate account for those major outlays is much easier.
Probably sounds confusing as hell. Evolves over time and really becomes simple. :)

Check out the photo of a 78 year old who is in great shape:
theguardian.com/science/2015/jan/11/-sp-live-forever-extend-life-calico-google-longevity

I do concur that a fund of funds investment, if you have one, is best started in a retirement account. I was not aware that a fund of funds cannot pass along losses to the investor. That pretty much nails using the IRA, Roth IRA or 401k.

At best, the Wiki statement that "A fund of fund ... cannot use [capital] losses" is extremely misleading, at worst, flat out wrong.
Any registered investment company (whether fund of funds or fund of individual securities) cannot distribute capital losses. But it is allowed to carry losses forward to later years, where it may use those losses to offset gains. If memory serves, funds are only allowed to carry forward losses ten years, as opposed to individual taxpayers who can carry forward cap losses indefinitely.
Nothing special about fund of funds here.
In fact, the boggleheads Wiki says just this: Vanguard's Target Retirement Funds' ''rebalancing can result in the realization of capital losses and the creation of tax loss carryforwards in the funds. The existence of loss carryforwards has historically resulted in minimal long-term capital gains distributions."
Vanguard Target Retirement Funds (2005-2025) tax distributions (boggleheads)
So whom do you care to believe: the boggleheads' Wiki, or the boggleheads' Wiki?

Only a handful of people working for my employer are over the age of 55. But I've learned that there is always an option!
Nobody on this board is aware of this fact, but I was born and spent my first 12 years of life living in Bangkok, Thailand as my father was the S.E. Asia GM for a large multinational and was based in Bangkok . I speak, read and write fluent Thai, which my parents say I learned before I learned English. My Mandarin isn't bad either, although I haven't used it for over 10 years... @JohnChisum ~ I reckon that you live in Manila? Been there many times and always enjoyed the musical abilities of the Pinoys, as well as their penchant for having fun!
Retirement for this young PopTart is a few decades off, but my wife and I reckon that we could retire to Thailand (probably Chiang Mai as Bangkok is a more expensive city) and enjoy the same quality of life (if not better) as in the USA for a much cheaper cost. Foreigners aren't allowed to own property in Thailand, but condos are available for purchase (after alot of haggling of course!). My wife and I figure on roughly $1000/mo. in expenses as we live cheaply. But nobody really knows what costs will be like 18+ years from now...
Will we actually retire to Chiang Mai? As I mentioned earlier, retirement is still a long ways off as we're raising two young children and have 18 years before we could obtain a Thai "retirement" visa at the age of 50. It's a dream for now, but retiring overseas, especially to a cheaper country which one knows well and likes, is an option to the bygone era of the "American dream".
Peace.

Hi Guys,
Wow!
When I first started thinking in terms of an early retirement, I was approaching 60. Thinking and planning for a mid-50s retirement was never in my playbook. Congratulations if you want and can execute that major league feat.
Every case is highly personal, and therefore singularly different.
In my case, my earning and saving career only started after completing graduate school and doing some military service. I was 30 before mustering out of the Army. At that time, my wife and I packed our entire belongings in an old Chevy and headed for California with the back seat still partially empty. No way could we manage retirement in just a little North of 20 years.
But that’s our story, and I’m sure each of you have your own compelling versions. For you younger folks, retirement will be a life changing event, and warrants careful and painful study before a decision is made. I say painful because of the many component uncertainties that feed that decision process.
One tool that addresses some of these uncertainties is Monte Carlo simulators. Monte Carlo analyses were specifically designed to assess risk probabilities under uncertain environments. During World War II, they played a significant role in the development of nuclear weapons. Within the last 2 decades, Monte Carlo simulations have been developed to facilitate retirement planning. These simulators are now readily accessible for all to exploit.
All the large mutual fund outfits offer this tool: Vanguard, Fidelity, T Rowe Price and others provide versions of differing complexity and differing input requirements. They all do yeomen work. I suggest you do a web search using Monte Carlo retirement planning as key words. You can choose your own poison from a long list of options.
One of my favorites is found at the MoneyChimp site. It is certainly not the most eloquent nor is it the most comprehensive option. But it is likely the easiest to input with instantaneous outputs from 1000 randomly selected cases. Here is the Link:
http://www.moneychimp.com/articles/volatility/montecarlo.htm
One of the benefits from these simulators is that what-if scenarios are quickly input and evaluated. Portfolio survival probabilities as a function of retirement time is the graphic output.
Test how significant the anticipated retirement length is to the portfolio survival likelihoods. Check out sensitivity to savings rate. Examine the survival impacts of guesstimated portfolio annual returns and their volatility by inputting various levels for each parameter. All of these sensitivity studies can be completed in quick time.
All Monte Carlo analyses only output probabilities. They don’t predict the future. That’s the nature of future uncertainties. But they provide the user with a feeling for the robustness of his plans and provide guidelines for more attractive options. Please give this working tool a try.
By the way, Monte Carlo simulators might also help retirees to make better informed portfolio asset allocation and drawdown decisions. None of this is perfect, but in the investment universe, nothing is ever perfect.
Best Wishes for wise decision making.

I think you mean well Dex but I can't help but wonder how that mindset would have worked coming out of Black Tuesday (Great Depression), Black Monday (crash of 1987) the last Great Recession or any number of hard times. Truly some will give up at anything but the majority will push through and find solutions.

Please go back and read my post. Those incidents do not have anything to do with what I wrote and do not apply. It has nothing to do with the stock market but trends and economics.
Also, one post can not include the all the reasons. For, example, I left out most have little or no savings, the middle class shrinking since the '70s and wages flat since the '70s, employer provided health benefits reduced or eliminated, defined pension plan gone, little in 401K, social security will be pushed out further, older workers (55+) eliminated by companies because they make too much, companies don't like to hire older workers, VAT will be instituted to help with the debt (and Obamacare).
In short the conditions that have allowed a comfortable retirement are gone for most and new challenges will make it even less likely.
Add it all up and my conclusion is valid.
I think you mean well for your children, prepare them for the future - not the past.