Another point. Many articles today stress that you really need $2 million for a comfortable retirement. One million may not be enough.

1. I agree that many financial "articles", including this one, are silly.
2. This article is really about asset allocation in retirement; the rest is cheap window dressing to frame the article. ($50K/$1M were simply neat round numbers for illustrative purposes.)
3. Waggoner errs in adding extra for income taxes - he's trying to match household income, and like IRAs, that's pretax also. (That is, income taxes come out of the $50K household earnings.)
Regarding people's comments here:
- IMHO health is one of the two big variables in retirement planning. The other is longevity. These are both areas where insurance can be invaluable - Medicare/Medigap or Medicare Advantage (Part C) for the former, and longevity insurance (deferred income annuity) for the latter. But they're not without cost.
- NYC - the median household income in Brooklyn is $45K; even in Manhattan is it "just" $67K. (Slate: Brooklyn's Median Household Income is Less Than $45,000 - Jan 9, 2014). One can get by, even in NYC on less than $50K, but the key phrase is "get by".
- Berkeley - I'm with davidrmoran on this one. $12K/year is foodstamp level income for one person, let alone three. Anywhere in the country. And unlike NYC, the Bay Area tends to be more homogeneous in housing/living costs (harder to find affordable pockets). From the Berkeley Pier to Walnut Creek (where there is no longer a T. Rowe Price office), from Baghdad by the Bay to Silicon Valley, the cost gradient is miniscule.

FYI: If you read any financial advertising, you know that your savings are inadequate, and you're likely to freeze to death in the dark a few weeks after retirement. For this reason, most Americans' retirement planning involves keeling over at their desks, or, failing that, starting a bomb-disposal unit as a retirement business.
But how much is enough? How about $1 million
Regards,
ted
http://www.usatoday.com/story/money/columnist/waggoner/2014/10/23/can-you-retire-with-1-millio/17789939/

You are welcome John. My wife and I have a strong position in Global Reach. Doubtful that Grandeur Peak funds are in many workplace retirement accounts which would also limit individual accounts.

Hi Guys,
In selecting her aggressive retirement portfolio, Benz wisely chose 7 funds that all had positive Alphas for the past 5 years. Now comes the acid test. Will these funds retain their positive Alphas for the next 5years?
Who knows? Historically, that has not been the case with reversion to the mean exerting its influence.
Best Regards.

FYI: We employ actively managed mutual funds and a stock-heavy portfolio mix.
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=668875&SR=Yahoo

FYI: From New York to California, Wisconsin to Texas, hundreds of thousands of teachers, firefighters, police officers and other public employees are relying on their pensions for financial security.
Private equity firms are relying on their pensions, too. Over the last 10 years, pension funds have piled into private equity buyout funds. But in exchange for what they hope will be hefty returns, many pension funds have signed onto a kind of omerta, or code of silence, about the terms of the funds’ investments.
Regards,
Ted
http://www.nytimes.com/2014/10/19/business/retirement/behind-private-equitys-curtain.html?ref=business
I hold a position in KKR: M* Snapshot Of KKR:http://quotes.morningstar.com/stock/kkr/s?t=kkr

Hi rono. Hard to give suggestions to a guy I used to take advice from. Heck, I think I remember guys like you and Ed talking about PRWCX 7 or 8 years ago.
Good luck on your roll over and have a happy retirement. I'm sure you and the Barron von Rothschild have all the bases covered.

Hi folks,
Just looking for your goodly wisdom. I'm retired and have a middle six figure 457 account (state gov't) that I just rolled into an IRA at Price (brokerage account). Took care of it online and over the phone in about an hour. Check's in the mail to me to forward. And yes, it's made out to them in my name.
I wee bit of background. 66 and retired. Active investor for 30 years (e. g. I was buying with my retirement account on Black Friday; I moved all the cash and bonds in both my wife and my retirement accounts into equities when the first Gulf War broke out; I went bullish on gold and silver in 2002 and hit my first homerun with Silver Weaton SLW.) Note that I am a momentum investor as compared to buy & hold.
I've got a DB pension and social security, no debt and wifey is about the same.
Some of this IRA I plan to spend wantonly and with great abandon. Some I plan to leave to my estate. Some I'll play with for giggles. What I need to do is to protect and safeguard the majority while covering myself against most economic probabilities. If we start with the traditional allocation it would be something like 34/56/10 - equities, bonds, cash. If I include a speculation fund, let's call it 30/50/10/10.
What percentage of int'l in each category?
What equity funds to consider?
What bond funds to consider?
What external funds to consider? (i.e. this is a Brokerage account so I could buy a Matthews Asian fund if I wanted).
Any and all suggestions are most welcome.
and so it goes,
peace,
rono

http://www.sec.gov/Archives/edgar/data/1156906/000119312514373975/d804455d497.htm
497 1 d804455d497.htm CAUSEWAY CAPITAL MANAGEMENT TRUST
Causeway International Opportunities Fund
Institutional Class (CIOIX)
Investor Class (CIOVX)
SUPPLEMENT DATED OCTOBER 16, 2014
TO THE PROSPECTUS DATED OCTOBER 15, 2014
THIS SUPPLEMENT PROVIDES NEW AND ADDITIONAL INFORMATION BEYOND THAT CONTAINED IN THE PROSPECTUS AND SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS.
On October 15, 2014, the Causeway International Opportunities Fund (the “Fund”) converted from a “fund of funds” to a Fund making direct investments in securities. Effective as of the date hereof, the seventh paragraph under “Taxes” in the Prospectus is superseded and replaced in its entirety with:
If you buy shares when the Fund has earned or realized, but not yet distributed, ordinary income or net capital gains, you will be “buying a dividend” by paying the full price of the shares and then receiving a portion of the price back in the form of a taxable distribution. You can avoid this situation by waiting to invest until after the record date for the distribution. The Fund expects to pay significantly increased taxable distributions of net short-term capital gain (that is, the excess of short-term capital gains over short-term capital losses) and net capital gain (that is, the excess of net long-term capital gain over net short-term capital loss) in 2014 due to its conversion on October 15, 2014 from a “fund of funds” structure to directly investing in portfolio securities. This is because when it converted, the Fund redeemed shares in underlying Causeway Funds that had appreciated from the time the Fund purchased the shares, causing the Fund to realize capital gain during 2014. Taxable investors receiving the distributions should be prepared to pay taxes on them (at ordinary income rates for the net short-term capital gain and, for non-corporate shareholders, at the 15% and 20% maximum rates mentioned above for the net capital gain). However, if you are investing in the Fund through a tax-advantaged retirement plan or account, or are a tax-exempt investor, there will be no tax consequences to you from those distributions.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
CCM-SK-022-0100

FYI: There’s been a debate in recent years about whether target-date funds expose investors saving for retirement to too much risk at the point they are leaving the workforce.
Now Rob Arnott, a respected investor and researcher, is raising concerns about the aggressiveness of the target funds designed for the youngest workers.
Regards,
Ted
http://blogs.wsj.com/totalreturn/2014/10/15/target-funds-are-too-risky-for-youngest-workers-arnott/tab/print/?mg=blogs-wsj&url=http%3A%2F%2Fblogs.wsj.com%2Ftotalreturn%2F2014%2F10%2F15%2Ftarget-funds-are-too-risky-for-youngest-workers-arnott%2Ftab%2Fprint&fpid=2,121

Okay, I'll bite. Why does an index fund close? Too low AUM? This one comes in one size only - institutional (but with a "modest" $250K min, not restricted to institutions).
Maybe they want to limit it to retirement plans and the like? (That's how American Beacon started out - as AAdvantage funds, designed for the AA retirement plan.)

http://www.sec.gov/Archives/edgar/data/809593/000080959314000116/ieisoftclose.htm
497 1 ieisoftclose.htm
American Beacon International Equity Index Fund
Supplement dated October 15, 2014
To the Prospectus and Summary Prospectus dated April 30, 2014
The information below supplements the Prospectus dated April 30, 2014 and is in addition to any other supplement(s):
The following information is inserted at the end of the section titled "Purchase and Sale of Fund Shares" on page 9 of the Prospectus and page 4 of the Summary Prospectus is deleted and replaced with the following:
The American Beacon International Equity Index Fund (the "Fund") will close to new investors as of the close of business on December 31, 2014. Existing shareholders as of that date may continue to purchase, redeem or exchange shares of the Fund on any business day, which is any day the New York Stock Exchange is open for business.
The following information is inserted as the final paragraph to the section titled "Purchase and Redemption of Fund Shares – Eligibility" on page 18 of the Prospectus:
Effective as of the close of business on December 31, 2014, the Fund will close to new investors. The Fund will continue to accept additional investments (including reinvestments of dividends and capital gain distributions) from: (1) existing shareholders of the Fund who had open accounts as of December 31, 2014; or (2) participants in most qualified retirement plans if the Fund was designated as an investment option as of December 31, 2014. Investors through financial intermediaries who did not have a funded position through the intermediary by December 31, 2014 may not invest in the Fund after that date.

Hi rjb112,
I rarely, if ever, post on Bond and fixed income issues because I consider myself rather naïve on these matters. I plead an embarrassing level of ignorance. Many MFO members are far better informed on this subject than I am, so I suggest you address your income questions to these fine folks.
Since you asked, and since I have been investing in various forms of the fixed income universe for decades, I will submit a few incomplete thoughts on bond/fixed income investing. As usual, I will document my thoughts with a couple of references.
Using a ship as an analogy, equities are the power-plant that drive the ship towards a target safe harbor. Fixed income and bond components serve as a rudder to more closely align the ship on the desired compass heading. The rudder does slow the ship a little.
Volatility is very acceptable when you are young and accumulating wealth, but losses its attractiveness when approaching retirement. Hence, I morphed from a heavily weighted equity portfolio a few years ago to a more neutral portfolio (50/50 mix) today.
When wisely assembled, a balanced portfolio can almost maintain the annual returns of an all equity portfolio while reducing volatility (standard deviation) by half. Volatility always functions to attenuate compound returns below annual return levels.
Bond diversification helps to reduce overall portfolio volatility just like equity category diversification does. The bond market offers about as many subcategories as does the equity marketplace. Just like equities, these bond subcategories deliver a random checkerboard of annual returns; so the bond segment of my portfolio has many components to smooth the journey. Here is a Link to a Vanguard Bond Table of Periodic Returns:
http://www.vanguard.com/jumppage/international/web/pdfs/INTLCCRD.pdf
Just like the famous Callan Periodic Table of Investment Returns, the annual fixed income rewards bounce all over the space. Predicting future winners is an impossible task, so diversification is a reasonable strategy.
Likewise, forecasting future inflation rates and interest rates is also hazardous business. History suggests that the best guess for interest rates 10 years from now is what the current value is.
I do believe that just like market professionals have improved their skill sets, so has the Federal Reserve. I don’t expect wild inflation rate changes like those recorded in the late 1970s. The Fed actions can not guarantee a “soft” landing, but I do believe that they have sufficient control and data to pilot the economy to a “softer” landing.
However, I do not fully trust my projection of a more stable interest rate environment. Therefore, the bond portion of my portfolio emphasizes short duration elements as well as TIP components. Once again, uncertainty pushes me in diversification’s direction.
Costs always matter. That’s especially the case when investing in bonds. Very, very few actively managed bond funds outdistance their passive rivals. Given today’s low interest rate environment, costs are extraordinarily critical. I control costs by doing most of my bond business with passive Vanguard products (exceptions included later). They have served me well.
Even given the present low interest rate levels, bonds are still an important segment of an individual’s portfolio. Vanguard has a nice recent report that illustrates this point. Here is its Link:
https://personal.vanguard.com/pdf/s704.pdf
When my portfolio was rather thin, I decided to diversify into the bond market by using Balanced mutual funds. I was lucky and selected some winners. After decades, I still own these funds. They are the exceptions I noted earlier. These are Dodge and Cox, Wellington, and Wellesley mutual funds. I report these merely for the record, and do not necessarily recommend them for anyone.
I hope this is a little helpful. Sorry for this unorganized post; it is a series of random, real-time thoughts on your question. I’m lazy and commit little time to the bond marketplace. Please consult with better informed MFOers on this topic.
Best Wishes.

FYI: If you are searching for reliable retirement income you might find yourself in a tough situation these days. Bank CD’s pay close to nothing. Bonds are expensive and aren’t paying very much interest either. What’s an investor to do?
Regards,
Ted
http://www.forbes.com/sites/greatspeculations/2014/10/01/use-mutual-funds-to-create-retirement-income/print/

FYI: Successful investors know that mutual fund distribution season is approaching, and 2014 is shaping up as the fifth year in a row of increased largesse by mutual funds.
The potential downside would be higher taxes for shareholders in accounts held outside of tax-deferred retirement accounts like IRAs or 401(k)s.
Regards,
Ted
http://license.icopyright.net/user/viewFreeUse.act?fuid=MTg1NTM3OTg=
Enlarged Graphic: http://news.investors.com/photopopup.aspx?path=WEBMFfund101314.gif&docId=721282&xmpSource=&width=1000&height=603&caption=&id=721283

The link seems to work for me.
No different from OAKIX (except the timing): "Effective October 4, 2013 the Fund closed to new investors at most third-party intermediaries. The Fund remains open to retirement plans, most investment advisors with existing positions, and any new and existing investors who purchase shares directly from Oakmark."
The funds will remain open to all new investors, just not through all channels (supermarkets). Nevertheless, expect M* to report the funds as "Closed to New Investors", as it does now for OAKIX.

Raw figure (with DODIX included) = 23.5%, slightly above normal. That's a bit deceptive, since it doesn't include cash held by managers of allocation type funds. Without doing a M* X-Ray, I'll guess the true cash component at about 30%, a bit higher if you include the short term bonds those funds hold.
Of course this discussion only makes sense in context. (conservative old **** many years into retirement.)