Since several of the suggested alternatives hold less than the 18% EM of DODFX, perhaps this EM lack isn't a problem. If the taper brings money back from riskier equities, such as EM, this may not be the year for more EM; and it's possible that DODFX will increase their percentage when it's appropriate. The brokerage window allows more sophisticated investors to adjust their risks as they desire. I'd look at costs as the main factor in selection. Relying on funds with individual or small groups of managers seems at variance with my concept of fiduciary responsibility for a college retirement fund, so D&C avoids that risk.

http://www.sec.gov/Archives/edgar/data/1103243/000141304213000418/rockypeak497cls.htm
497 1 rockypeak497cls.htm
PFS Funds
Rocky Peak Small Cap Value Fund
Supplement dated December 13, 2013
to the Prospectus dated August 1, 2013
The Board of Trustees of the PFS Funds (the “Trust”) has approved a Plan of Liquidation (the “Plan”) relating to the Rocky Peak Small Cap Value Fund (the “Fund”), effective December 13, 2013. Rocky Peak Capital Management, LLC’s, the Fund’s investment adviser (the “Adviser”), recommendation to the Board to approve the Plan was based on the inability to market the Fund and the Adviser’s indication that it does not desire to continue to support the Fund. As a result, the Board of Trustees has concluded that it is in the best interest of the shareholders to liquidate the Fund.
In connection with the proposed liquidation and dissolution of the Fund, the Board has directed the Trust’s principal underwriter to cease offering shares of the Fund. Shareholders may continue to reinvest dividends and distributions in the Fund or redeem their shares until the liquidation.
It is anticipated that the Fund will liquidate on or about December 30, 2013. Any remaining shareholders on the date of liquidation will receive a distribution in liquidation of the Fund. If you have questions or need assistance, please contact your financial advisor directly or the Fund toll-free at 1-888-505-0865 or the Fund’s adviser, Rocky Peak Capital Management, LLC at 1-310-963-8009.
IMPORTANT INFORMATION FOR RETIREMENT PLAN INVESTORS
If you are a retirement plan investor, you should consult your tax advisor regarding the consequences of any redemption of Fund shares. If you receive a distribution from an Individual Retirement Account or a Simplified Employee Pension (SEP) IRA, you must roll the proceeds into another Individual Retirement Account within sixty (60) days of the date of the distribution in order to avoid having to include the distribution in your taxable income for the year. If you receive a distribution from a 403(b)(7) Custodian Account (Tax-Sheltered account) or a Keogh Account, you must roll the distribution into a similar type of retirement plan within sixty (60) days in order to avoid disqualification of your plan and the severe tax consequences that it can bring. If you are the trustee of a Qualified Retirement Plan, you may reinvest the money in any way permitted by the plan and trust agreement.
This Supplement, and the existing Prospectus dated August 1, 2013, provide relevant information for all shareholders and should be retained for future reference. Both the Prospectus and the Statement of Additional Information dated August 1, 2013 have been filed with the Securities and Exchange Commission, are incorporated by reference, and can be obtained without charge by calling the Fund toll-free at 1-888-505-0865.

My retirement plan at work has the following foreign funds with more than 10% in emerging market exposure:
Fund Name, (expense ratio), (EM%)
• American Funds EuroPacific Growth Fund - Class R-6, (.5), (15%)
• Vanguard Total International Stock Index Fund – Inst. Shares, (.12), (15%)
We also have a dedicated EM fund, which happened to close recently and was mentioned in your December commentary, Wells Fargo Advantage Emerging Markets Equity Fund.

I love the chart. Very informative.
The good news is that I have held 3 of these funds for more than 25 years (PRCWX, MQIFX, MDISX), and one for several years (RYSEX). Oh, how I wish I had invested more than I did.
My point isn’t how smart I am. I’m not. I don’t have any great talent as an investor and I have lost money by making stupid investments. I did do one thing right. I invested my retirement money in funds that at the time had a record for excellent long-term results with low risk. The magazines and newsletters of twenty/thirty years ago recommended these funds as high quality investments (I believe Forbes magazine, for example, consistently gave the Mutual Series funds “A” grades in both up and down markets, in its ratings in the 1980s.) I simply followed that advice.
My point is that the funds that have solid long-term records today are probably going to be the winners ten years from now. That is true even if there are manager changes (I do miss Michael Price) and events we don’t expect.

Hi, guys.
For the past two years I've been working with a small task force to redesign Augustana's retirement plan. We had laughably low participation rates, no incentives to participate and way too many options: all of Fido, T Rowe, TIAA-CREF, Thrivent (historically Lutheran college, and Thrivent is the successor to the Aid Association for Lutherans) and Vanguard.
We've made most of the structural changes we need: outreach, auto-enroll, auto-escalate, matching rather than a flat college contribution, agreement on a core list of funds and a proviso for a brokerage window through which the few active investors on-campus can access many more options. The core will offer Vanguard's target-date funds (sorry, Charles, but we're required to have a default option for employees who refuse to choose and we're legally safer in a target-date series than in a fixed hybrid portfolio), a number of index funds (Total Stock Market, et al) and a handful of active funds (likely PIMCO Inflation-Response, Low Duration, money market, DFA SCV and a few others).
Our core fund list (ones into which the college's contribution might be directed) does not have dedicated e.m. exposure. The argument is that we don't want to offer anything too risky in the core, though the brokerage window will make a substantial array available for folks who want it. (I actually argued for at least a multi-asset e.m. fund but I respect the decision the others reached.)
That's the background. Here's the question: are their core international equity funds that might offer better e.m. exposure than Dodge & Cox International (DODFX)? That's the currently-proposed international option for the core and it does have something like 18% e.m. The problem I'm having is that many funds which traditionally offered e.m. exposure (Oakmark International) decamped several years ago so merely looking at current e.m. exposure tells me very little about prospective exposure.
In general, the criteria are low cost, managed risk, stable firm.
Any thoughts?
David

Reply to @cman:
He is talking about collective risk management, not about individual risk management.
He is also talking about socialism as a good idea, but without a way to implement it because of the "moral hazard". That "moral hazard" is a defining trait of all humans, it is built in the core of humanity. It is *not a good thing or a bad thing, it's just the way it is. Not to take it in consideration when creating policies, makes the policies bad, not the people they are meant for. To be clear, that "moral hazard" refers to: skipping work when you can, working less if the pay is the same, working as little as possible for as much money as possible.
Then after acknowledging this is an utopia, he talks about finance as a way to take wealth from those that don't need it as much and give it to those that need it the most (maybe that's what you mean by "framing", framing socialism as "finance"). I agree with that as long as it is done voluntarily, also known as philanthropy. Anything else is plain wrong. Not letting people starve, providing shelters or keeping kids from poor families in school, is NOT wealth redistribution. (when I say shelter, that what I mean "a shelter")
He talks about how the wealth difference after retirement is at it's worst, simply because some were able to accumulate more than others. He sees that as a problem, he says that something needs to be done about it. I wonder what people conscious about their retirement think about this, people like members of this forum.
He also predicted the real estate bubble in '08, and advocates global spread of risk. But, to my knowledge, one of the more important reasons for the easy money was exactly the false comfort provided by the spread of risk and the reason the whole economy was dragged down was also because of the risk being spread.
Capitalism is not an expressions of risk management.
Socialism has a predefined goal (risk management? maybe, you can call it that), and to achieve it, false assumptions are made about the human nature, and that is why you have the so called "moral hazard".
Capitalism starts with the human nature, without a predefined goal (risk management), each individual has it's own goal, including giving everything to the poor. And each individual might use the risk management to achieve their goals.

Reply to @BobC: Hi Bob. I think the comments on this post come from people who probably have an understand personal finance, love to do it themselves and make it their hobby. What goes over their head is that they are unique. They make up probably less than 5% of the population.
Most of my friends and coworkers are just not interested in learning about different investments, portfolio construction, ect... It bores them. They know they have to save in a 401k and they religiously do so every pay check and they put their money into Target Date funds, the best invention ever made for the typical retirement saver. They only become aware that they need advise when it gets close to retirement, or in our work case, another down sizing. Then the talk at the break room table is, my adviser said this or my advisor said that.
In most cases, I think, people seek out financial advise. They wouldn't be seeking if there wasn't a need, a perceived benefit and piece of mind.

Hi David. Thanks for hosting this event.
My question is, as someone who is 20 years away from retirement, what percentage of one's bond fund allocation should be allocated to the high yield portion of the market.
Second, on average, what percentage of the fund will be invested globally and in emerging markets?
Thanks David. I appreciate your work.
Mike_E

Thank you all for your comments, they are much appreciated. It was a very good starting point for trying to understand the way IRS is working. I am used to work with numbers and it seems to be really complicated, no wonder so many people are burned when it comes to retirement savings.

There is no right number. Missing from the original post is any mention of age, circumstance or risk tolerance - all very relevant to fund selection (but not to number of funds owned). The trend towards "fund of funds" (including the target date retirement variety) makes the question even harder to address. Holding just 3 of these hybrids - say one each from T. Rowe Price, American Century and Oppenheimer - would, in fact, already have you in 25-30 different funds. So, it's pretty hard to answer. And, as we get older and our time horizon shrinks, some of the areas you mention, like small cap, may no longer fit our risk appetite. Your question also assumes the investor maintains a static allocation at all times. Some do. But it's not uncommon for folks to move in to and out of differnt types of funds depending on their macro-economic read or other factors. So for them, the "right" mix today may not be the right mix a few months from now,. fwiw

Reply to @Junkster:
Hi Junkster,
Thank you for taking time to read and reply to my post. I appreciate both your interest and your thoughts on the matter. You surely present a welcomed different prospective.
Executing a successful investment program may conceptually be a simple task, but it is not an easily executed assignment. Plentiful evidence of the difficulty overwhelms us. Individual investors only recover one-third of the market rewards over time; professional money and mutual fund managers often fail to capture index-like returns. The interconnected linkages that govern macro and microeconomic happenings are far too numerous and too dynamic to model with any reliable fidelity.
I certainly agree with your observation that an individual with a 2 million dollar portfolio and a drawdown requirement of only 35 thousand dollars annually doesn’t need the sophistication of a Monte Carlo analysis. That’s an easy strawman case to make.
My posting was firmly directed at those folks who struggle to satisfy savings, investment, and retirement decisions under tipping point conditions. I suspect most folks fall into that stressful category. My wife and I sure did. Monte Carlo analysis served us well during such worrisome circumstances.
Yes, during my pre-retirement life I was an engineer. My wife was an experimental scientist. We consult and make team decisions. We were both intimately familiar with mathematical tools and modeling construction so the Monte Carlo approach was a comfortable tool to adopt to supplement our financial decision making. Not everyone will be in a similar position.
If Monte Carlo methods are outside your comfort zone, simply do not use them. Everyone has the freedom to choose their own investment philosophy, rules of engagement, and toolkit to implement their selected strategy. I welcome the diversity in strategies since these ultimately drive the marketplace to more efficient pricing. Active traders are a necessary ingredient in that mix. I thank them all for carrying a heavy load.
Investor success and high IQ doesn’t always highly correlate. Emotional stability and behavioral biases have a major impact on investment success. In the preface to Ben Graham’s “The Intelligent Investor” classic book, Warren Buffett stated that, “To invest successfully does not require a stratospheric IQ . . . . What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding the framework”. Monte Carlo calculations will do nothing to control the emotional dimension.
Studies that examine the relationship between IQ and investing results yield a mixed conclusions bag. Here is an abstract from a study completed by Mark Grinblatt and company titled “IQ, Trading Behavior, and Performance”:
“We analyze whether IQ influences trading behavior, performance, and transaction costs. The analysis combines equity return, trade, and limit order book data with two decades of scores from an intelligence (IQ) test administered to nearly every Finnish male of draft age. Controlling for a variety of factors, we find that high-IQ investors are less subject to the disposition effect, more aggressive about tax-loss trading, and more likely to supply liquidity when stocks experience a one-month high. High-IQ investors also exhibit superior market timing, stock-picking skill, and trade execution.”
Other studies conflict with this IQ correlation finding.
I have always favored Tom Bulkowski’s technical analysis because he typically includes probability of success odds for the countless formations that he analyzes. These days, I use his graphic interpretations as a secondary, confirmatory-like reference. Here is the Link to his superior website:
http://thepatternsite.com/
I would never solely use technical analysis when making an investment decision. Likewise, I would never base a decision solely on Monte Carlo analyses. Each has its merits and pitfalls. Each tool in an investor’s toolkit must be judiciously used for specific purposes. As a general rule, the more tools accessible, like the MFO website, the higher likelihood of a successful investment decision.
By the way, Bulkowski’s book “Encyclopedia of Chart Patterns” contains an excellent Statistics Summary section of all his pattern formations with a listing of a probability failure rate and a likely estimated gain or loss. Most technical analysis books do not document these additional estimates.
Indeed, the MFO site likely attracts conservative investors. That’s obvious because it primarily services mutual fund users. Mutual funds, with its holdings diversification, were originally constructed as long-term investment vehicles offering a lower risk profile than individual stocks. From a time perspective, that has devolved somewhat. Today, relaxation of trading rules is the order of the day by profit seeking firms. Basically, I still do not play in that arena. I remain in the conservative investor camp, especially when using a trading infrequency measure.
All investors have the freedom to choose their own poison, their own modus operandi. I was just alerting MFOers to the potential benefits of Monte Carlo simulations, perhaps another form of poison, but from my perspective, a wealth protecting, somewhat magical elixir.
Once again, thank you for participating in this exchange.
Best Wishes.

Either others or I are misreading your tax situation. A single taxpayer in the Roth phaseout range is likely in the 28% tax bracket. (For example, the tax on $120K gross taxable income - with $11K of that in cap gains/qualified divs, using standard deduction and one personal exemption - is $22,547.75, or 18.79% of gross income.)
A 28% marginal tax bracket does not strike me as low.
For a US citizen, I would say that if you are maxing out all your tax shelters, then go post-tax, because that lets you get more money sheltered. That's because you're putting in post-tax dollars, worth 1/3 more (a pre-tax dollar being worth only 75c upon withdrawal and taxes). By post-tax, I mean Roth 401K and/or Roth IRA.
Even if one wound up paying 28% now vs. 25% later, the additional amount you get to shelter makes this worthwhile. But I haven't checked the taxation of nonresident foreigners, so I don't know those calculations.
If one is not maxing out, then contributing pre-tax can come out better (if one assumes a lower tax rate upon withdrawal). For example, if you contribute $1 pre-tax, and take it out at 25% tax bracket, you've contributed 75c post-tax value. If you take that same dollar now, pay 28% tax on it, then you contribute only 72c to a Roth. (This assumes you don't have extra cash to contribute another 28c, which is where the "maxing out" assumption comes in.)
As to cashing out when you leave - it seems you should be able to transfer the 401k money to an IRA (based on the statement above that foreigners can own Roth IRAs).
Note that contributing pre-tax to the 401K might reduce your AGI enough that you could contribute the full amount to a Roth IRA.
As to what happens if you contribute too much, see Fairmark. Short answer - pull the excess (including earnings) before your taxes are due, otherwise penalties are harsh. Easy to correct.

Reply to @Junkster: Hi Junkster. you are a refreshing part of this board because your approach differs from most. I'd venture to say, many people on this board try to compound their money by chasing the best funds, build the best portfolio, reduce equity exposure at the wrong time and vise-a-versa. My guess is the results for most of us are no better than being in a retirement target date fund. I include me in that group, but what fun is a target date fund? But I'd say you are refreshingly different and interesting.
I happen to think monte carlo is an interesting tool, mostly because my brain is comfortable with numbers. I've been using statistical process control and lean manufacturing techniques my whole career to improve the manufacturing process. I like that percentages and probability can give insight and help guide me in choosing a path forward. Saying that, I'm not sure monte carlo really steers peoples actions. But that's neither here nor there.
Your back ground as trader/investor sets you apart from probably 99% of the people here (how's that for a meaningless statistic used in a discussion :) . Compounding growth is your thing and you seem to be darn good at it. I've even used your suggestion on RYOIX earlier this year and that worked out pretty good. But you again are very unique in your skill set.
I guess what I'm trying to say is, your comment,

But I would think they might be better off spending less time on the monte carlo "nonsense" and more time on compounding their nest egg.

is easier said than done by most everyone on this board. It ain't gonna happen.
In closing, unlike that other guy, you are interesting to the point, un-wordy and un-haughty. If you put out a news letter laying out your timing and trades, I'd probably buy it. But I'll run monte carlo from time to time too - can't help myself. Keep up the posts...

Hi Guys,
I truly do not understand the reluctance of a few MFO participants to consider adding Monte Carlo methods to their financial toolbox. It is a powerful tool with unique capabilities and is specifically designed to address complex and uncertain issues. Offhand dismissal of the technique is not a sound strategy.
Monte Carlo formulations have a distinguished scientific history. Enrico Fermi used it to model atomic neutron diffusion in the 1930s. Stanley Ulam and Johnny von Neumann formalized the tool when developing nuclear fusion algorithms at Las Alamos, New Mexico in the early 1940s. The technology was given the Monte Carlo name because it was a secret World War II project.
It was slowly introduced into the financial and investment community as computers became cheaper and more accessible. Nobel Laureate Bill Sharpe made the tool available to the general public with his Financial Engines website in 1996.
Here is the Link to the website: http://corp.financialengines.com/
Take particular note of the financial institutions that use the Financial Engines toolkit. The extensive listing is literally the honor roll of the investment universe. That is a well recognized accolade for a tool that helps in the decision making process for modeling very uncertain events.
The three major mutual fund houses (Vanguard, Fidelity, t. Rowe Price) all offer a Monte Carlo simulator. Financial business entities all deploy various types of Monte Carlo programs to facilitate and to formalize their decision process. Private Monte Carlo codes are accessible to individual investors from numerous sources. The Monte Carlo simulator is ubiquitous throughout the financial industry for solid reasons. It yields guideposts for uncertain investment decisions.
I have mentioned my favorite “The Flexible Retirement Planner” in earlier postings. Here is the Link to that excellent resource:
http://www.flexibleretirementplanner.com/wp/
I also like “Moneychimp” because of its simplicity. Here is the Link to that tool:
http://moneychimp.com/articles/volatility/montecarlo.htm
If you are not comfortable with pure Monte Carlo codes, you might like a different approach offered by Firecalc. That site uses actual historical returns with structured starting dates to generate a set of equity returns. Here is the Link to that website:
http://www.firecalc.com/
I am constantly amazed at how quickly an investor can explore his retirement possibilities and pitfalls.
To illustrate, I’ll use The Flexible Retirement Planner to explore three retirement dimensions. As a baseline, I’ll postulate a portfolio with a 7.5 % average annual return with a 13 % standard deviation volatility. That’s representative of a 60/40 equity/bond portfolio mix. I’ll assume a 30 year portfolio survival requirement with an initial $40,000 annual drawdown need (these programs adjust for inflation; I selected a constant 3 % level).
First, I’ll postulate initial nest-eggs of $500,000, $750,000, and $1,000,000, all in taxable accounts. For these starting conditions, the Monte Carlo analyses projected survival likelihoods at a disastrous 2 %, an unacceptable 31 %, and a highly risky 68 % rate, respectively. That’s a significant and appalling insight. Retirement is not a good idea.
Second, how much of an improvement can I anticipate if I cutback my annual withdrawal rate to $35,000? Again, for the $500,000, $750,000, and $1,000,000, portfolios, the survival probabilities become 7 %, 50 %, and 81 %, respectively. I’m still not sanguine with these likelihoods. Still too, too risky.
These simulations suggest that I should delay retirement until I acquire a larger nest-egg. How much does a $1,250,000 portfolio enhance the odds? The survival prospects increase to an attractive 94 %. Patience will be rewarded.
Third, s few sensitivity scenarios are worth exploring. For example, what is the deterioration to the 94 % success likelihood if the portfolio only provides a 7.0 % annual return rate? The Monte Carlo code generated a respectable 91 % survival probability. That output suggests some robustness to the plan. What-If scenarios are easily examined on these Monte Carlo tools.
This entire analytical sequence took about 15 minutes to complete. The study is surely not exhaustive, but serves to illustrate the instructive power of these Monte Carlo programs.
Indiscriminately tossing the Monte Carlo codes away as not trustworthy or useful is shortsighted and misguided. These tools certainly can not predict future investment returns; nothing and nobody can. But they do provide guidance and awareness of the risks associated with numerous investment and retirement decisions. In these uncertain environments, Monte Carlo probes can be deployed to estimate the success/failure odds and to discover approaches that can enhance any troublesome odds.
Monte Carlo will do workhorse duty for you if you just give it a test ride.
Your comments are always welcomed.
Best Regards and Merry Christmas.

I am trying to see what makes most sense, tax wise:
- I am 30, not concerned at all about retirement
- not an US citizen, one day I might have to cash out and leave
- last year my effective federal tax rate was 18.76%, and state rate was 5.51%, this year a little bit higher
- I already get the most out of my employer: 4% when I contribute 5%
- I can easily add more to my 401k, I invest most of my income anyway
Is it better to use pre-tax money to fund my 401k and not have easy access to them for 30 years, or save/invest with after-tax money?
Basically: "possibility of lower taxes 30 years from now" vs. "taxes and penalty if I decide to cash out"!

I "think" I am retired or at least trying to be retired. Albeit, since my profession was that of a trader, primarily equity and bond mutual funds, you never actually retire. But very recently I have decided to concentrate only on bonds, bonds, and more bonds and forget about equities and equity funds entirely. I just don't want the envitable drawdown, confinement, and attention to detail associated with equities, at least as compared to the more tame and controlled drawdown associated with bond funds. There is always a bull market somewhere in bondland and where prices are in the tight rising channels I focus on. Presently, I am down to a mere 4% in individual stocks and 91% in bonds primarily HFRZX with a smattering in NCOIX and 5% cash.
As for obsessing over retirement and monte carlo simulations what am I missing here? I mean let's say an aging single investor (over 65) is debt free and has a nest egg of $2,000,000 (which hopefully is still increasing in size annually) plus social security and annual expenses after such social security of say $40,000. Why would he need all sorts of fancy calculations to know his nest egg will outlive him? I would think his problem would be more in spending and enjoying than saving and preserving in old age. I know a few who oversaved and overhoarded only to see their hard earned nest egg 100% completely eroded (before eventually going on Medicaid) by nursing home/care in the last few years of their lives.

Hi Guys,
You all know that I am a huge fan of Monte Carlo simulations for retirement planning purposes. I have considerable practical experience in this realm. As my retirement date approached such tools did not commonly exist, so I programmed my own Monte Carlo simulator. Monte Carlo analyses guided some of my retirement and post-retirement investment decisions.
I have reviewed the Pfau and Kitces paper; it surely offers a prospective that dramatically departs from the conventional wisdom. During my retirement work I did not explore the portfolio option that they now advocate.
I surely do not know if their proposed strategy of annually and incrementally increasing equity positions from a low initial holding percentage will truly enhance a retiree’s portfolio survival prospects. But the Monte Carlo method is certainly the proper tool to examine this somewhat shocking plan.
Today, on the Internet, we have free access to powerful Monte Carlo simulators to test the merits and shortcomings of the Pfau-Kitces hypothesis.
The best Monte Carlo retirement code that I am familiar with is “The Flexible Retirement Planner”. You will need Java to run the program. Here is the Link to that fine analytical tool:
http://www.flexibleretirementplanner.com/wp/
Please visit the site even if you are not immediately concerned with the current debate. You will discover that the code has many useful study applications for your personal investment decision making issues.
The input requirements are both flexible and easy. To examine the Pfau-Kitces strategy you will need to input a changing annual portfolio return/standard deviation estimate. Hit the “Additional Inputs” button to gain access to a screen that permits annual input variations. When ready, hit the “Run Simulation” button to get almost instantaneous simulation results.
I challenged the Pfau-Kitces findings by running a few exploratory scenarios. I did not do enough cases to come close to resolving the issues. For the limited test cases that I did complete, portfolio survival results were mixed and similar when comparing a typical 50/50-like portfolio mix against one that is bond dominated initially, and progressively approximates an increasing equity position. I assessed the minor survival differences as noise; the strategies were a wash from a portfolio survival percentage perspective.
Overall, I doubt the wisdom of increasing equity positions as a function of retirement age. The behavioral and psychological aspects of investing act against this plan. The strategy demands nerves of steel from an aging population.
Also, imagine the classic investment reward/risk plot. As expected return increases, the portfolio’s standard deviation increases. The plotted line represents average anticipated annual returns. In reality, at each risk (standard deviation) position, a returns distribution exists in the returns dimension.
When the standard deviations are low (representative of a bond dominated portfolio), the returns bell shape-like distribution is modest. As standard deviation increases (more equity influenced portfolio) , one expects that the bell-shaped returns distribution will become higher (better maximum return), but with a much wider distribution. If fact, that wide distribution will cause more frequent negative return years. Retirees will find this outcome to be more difficult to accept. I doubt the retiree will persist with this adventurous strategy given that singular event. Risk aversion grows with age.
I recognize that my comments likely add some fuel to the Pfau-Kitces debate, but that’s okay. An open exchange should contribute to a better informed investor.
Take care, and please visit the referenced website. I find it a reliable and useful tool.
Best Regards.

I have used different retirement planning software that has given me good direction. For about last 10 years my RMD, usually about 4% and SS have been a comfortable way to go and stopped earning income about 6 years ago. Next year I will raise my distribution to about 6%. We have both trad and roth and have not taken any roth and no plans to do so.
My equity has been about 70% and I have started reducing slowly.

Reply to @hank: I remained fully invested through the '08-'09 Crash, and kept adding to my portfolio, every single month. (Stopped---at retirement, in 2011.) So I'm not among those who missed the substantial gains when the Market took off again later in '09, after having pulled out. But I was, particularly after this past summer, swimming upstream, trying to grow my monthly bond dividend (and reinvest it all) in a stinky environment for bonds and bond funds.
I'm very much aware of the mistake made by those "chasing profits," who get onto the bandwagon late. I've used information gained here at MFO to very beneficial effect, in choosing my mutual funds. I am learning that one can get OUT too late, though. And it's ONE thing to switch from one fund to another while the Market is at or near all-time highs. It's ANOTHER to switch from bond funds to equity funds when the numbers have already been run-up. Leaves a bad taste in my mouth, but I cannot dwell on NOT having exited sooner. ...At this point, the end-of-year December pay-outs are something to look forward to. At this moment, my.........
-EM bond stake is down to 3.89% of holdings; (PREMX)
-"global" bonds (MAINX) 3.64% (And I notice the biggest holding is Cayman Islands stuff. This fund is going nowhere in terms of share price, but the quarterly divs. are nice. I take that as a good thing in the current negative environment. It's not fallen nearly as much as some other global and/or EM bond funds. And overall, I have indeed made money with it: +7.58%, actually.)
-.....domestic bonds (DLFNX) 2.51%
-That's 10.04% in bonds, so far....
MACSX and SFGIX holds some convertibles, I do believe; and MAPOX and PRWCX hold bonds, too.
MACSX 2.62% of portfolio.
MAPOX 8.02%
PRWCX 17.65%
TRAMX 3.14%
MSCFX 3.24%
SFGIX 2.83%
PRESX 15.34% (developed Europe. I looked. Not a thing "emerging.")
MAPIX 37.11% (I plan to move some of that to MPACX and some to MPGFX.)
Thanks to all. It's one thing to learn. Another to execute. And maybe sometimes, the only way to learn is by executing. "Break a leg," everyone.

I find these kinds of 'research' studies to often have very little application to real-world practice. Additionally, these are based on past history, the last 30 years of which included a bond bull market. In some ways, things ARE different for those starting retirement now, a LOT different than they were 30 years ago. One important aspect is that people are living longer. We run our client lifetime income projections to age 100. Another key point is that there is no 'average' retiree. Our experience is that they have different risk tolerances, different income needs, different lifestyles, different goals in terms of whether they are comfortable spend down their assets or not, just to name a few. And given the current state of health care in this country, and with the potential for the ACA to implode being real, how do retirees plan for health care costs? We tell clients they will absolutely need to be flexible in their investment allocations.