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.

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.

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 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.)

@00BY: I was about to mention that yesterday( PRWCX). But that is closed to new investors for quite some time. "Closed to new investors except for a direct rollover from a retirement plan into a T. Rowe Price IRA invested in this fund"

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

EVERY kid in the U.S. has an "insurance Plan" for a comfortable if not rich Retirement......
Show it to them...

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?

Wouldn't give up my younger years (oh the good times) for anything, EXCEPT if I knew then What I know now about investing, I could have retired a very wealthy YOUNG man, instead I retired 60ish with all the money I will ever need...OH Well.....
Maybe carefree young AND financial secure retirement is still the way to go..seems to be working...

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.

It is a shame that you didn't enjoy your younger years. I try not to tell myself, "just wait until retirement", but I do try to make the most of the present.

OK, maybe I exaggerated a tad. But my 20s did suck. I was a lost and aimless person that lived in abject poverty. But the 1980s were among my best living in the Sierras with sunny days almost 365 days a year. Still, I was the poster boy for "not living in the present" since all I did was focus on the future and retirement. I am just thankful and very blessed that mindset worked so that now I can enjoy the "precious present" as much as I do.

It is a shame that you didn't enjoy your younger years. I try not to tell myself, "just wait until retirement", but I do try to make the most of the present.

If anything will be different for those younger than you and I it will be that defined benefits will not be a common component of retirement.

In a way defined benefits were never a common component for retirement. People didn't get it if they didn't stay with a company long enough, companies went bankrupt etc. I think at its peak only 25% of workers had defined pensions (again they may not have received it.).
The best place to get a defined pension now is the US Gov't.

Hi Dex,
I made a decision to take an early pension (defined benefit) at age 51 after 27 years of service. If anything will be different for those younger than you and I it will be that defined benefits will not be a common component of retirement.
I will not qualify nor did I significantly contribute to SS. I needed to combine my "defined benefit" with a one time opportunity to buy and "extra annuity" to make my budget work. Budgeting, saving and thriftiness is what has allowed me to consider retirement at 51 and it will be that same attention to personal finances that will serve me well going forward.
I moved to a no income tax state, bought a condo in 2012 for $35K that has tripled in value in three years. I drive multiple 20-25 year old cars...that's plural. I furnished my place mainly by finding good deals on Craigslist and the like.
After 50 I started reminding my 50+ year old friends that:
"Today is our last best day...and tomorrow will be our next last best day."
In other words, If you have a desire to do something...do it today. There are no guarantees when it comes to tomorrows.
Thanks for the thread.

Dex, love that someone here has finally talked about their annual expenses in retirement. I live in a real low cost of living region of the country and all my *single* friends that are retired live *very* comfortably off $32,000 to 42,000 yearly. Some even travel to wherever. The key is being debt free. Our only disagreement is about enjoying life when you are young because it will suck at 55+. At 68, life has never been better - both financially and health-wise. No way would I want to go back to my younger years. They sucked!

@catch22: Thanks for your input. Moving some of vtsax to poskx: is a good idea, the latter being from primecap family. My equity is purely US and at 90%, do not expect current income even after retirement in 2018(except capgains from the likes of prhsx, vhcox etc in the taxable accts). I use vanguard brokerage and essentially most funds are ntf.

@dicksonL
Finding my username in your post.....not knowing your other holdings or whether your IRA(s) has access to a brokerage feature, to allow you to place your monies just about anywhere; I can only add to what msf noted with a few trinkets of thought regarding your questions.
With the following in mind; per Mr. Snowball's "statement of the obvious", that "We cannot vouch for the accuracy or appropriateness of any of it,"
This is my/our view from this house; but will not be appropriate for everyone regarding a taxable acct. or a tax sheltered acct. as noted for your 401k and IRA(s).
You noted: " Since IRA acct can go more aggressive, for tax free growth for 6 more years( a lesson I learnt only 2 years ago) before RMD kicks in, I am tweaking my portfolio, making more index based in taxable and aggressive in IRA. my 401k with ltd. choice is on s&[email protected]%"
>>>I will presume you are stating that your IRA holdings may be invested in whatever without current concern about taxation. Aggressive, for me; has a different meaning. Aggressive could perhaps imply a portfolio of 100% in equity investments.
I agree with msf regarding the choices you noted in your taxable account; and agree that one should place whatever is most tax efficient for your choice of holdings into this area.
As for the tax sheltered accounts; one does not have to be concerned with taxation at this time; so one may "fiddle" with whatever is most appropriate for their risk/reward investment emotion. Buy and sell when you need or choose to without regard to current tax from the transactions. This, obviously; is the nice part of tax sheltered holdings. In the end, per current tax policy; we/you will pay tax on the withdrawals at an ordinary income rate at the federal/state level, yes?
A brief overview would be that you may choose to be aggressive with your investments in both types of account holdings; leaning towards the most tax efficient for the taxable account, eh? Two choices were noted in your post and in msf's reply about tax efficiency. I do not have a direct opinion of either of your choices. You noted replacing one with another. Perhaps you may decide to keep the original fund, but move some of this money to the other fund, too. I have not looked at the funds, so I don't know how similar they may be regarding the investment style/holdings.
The majority of our holdings are within tax sheltered accounts; so we have not been concerned about tax efficient holdings. Our main goal has always been captial preservation (money to live for another day, to take advantage of the long term compounding effect) and capital appreciation in whatever form it may arrive, be it income/yield or price appreciation. This goal, of course; is regulated with our own value of risk and reward from the investments.
Currently, we are about 65% equity within the broad U.S. and Europe areas. In June of 2008 we were at 90% investment grade bonds. Our portfolio is ever changing and may be slightly aggressive for some near or in retirement; and will remain in place, until we feel the investments are no longer working/happy.
Only my 2 cents worth.
Take care,
Catch