Page 118 - Ready Set Retire

Stephen J. Kelley

out to year 29 ½. 100% of the time, with inflation. And
remember, if market losses were to come at the beginning of
your retirement, income failure could happen quickly.

So what, exactly, is the market adding to this scenario? If our
Monte Carlo model as indicated by Morningstar says you must
reduce your payout to 2.8% to have a 90% probability that your
money will last 30 years. However we just saw there is a safe
alternative that provides a half percent more ($2,500 per year)
with 100% certainty you will get to 29 ½ with no market risk.
What are you actually getting for putting your money in the
market? What purpose the sleepless nights and worry during
downturns?

Well, what if I want more than just 2.8%? How can I get that?

Okay, we have seen now you can actually get more than the
Monte Carlo plan yields by simply removing the risk. Reread
the beginning portion of this chapter for a reminder of what
risk does. However, you may not know it is possible to get
much over 3%-4% – or even more – from your retirement
savings, without risking running out of money. Ever. But like the
above, you will never hear about it from your Wall Street
planner. I wonder why?

The trick is twofold. First remove the market risk. We’ve done
that in the example above. Second, remove that whole, “how

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