Compared to the total asset base, when do annual spending needs become substantial and when are they not substantial?
5%?
10%?
20%?
30%?
At what point do we consider them substantial enough to affect risk tolerance/IPS作者: IAmNeil 时间: 2011-7-11 20:10
I would say anything beyond 10 makes client vulnerable
no rule of thumb though作者: Analyze_This 时间: 2011-7-11 20:10
Also, along the same lines...
In the 2007 AM Exam Q1 they talk about the option of "re-employment" because the retired couple are still young (i.e., 50 years old)
How old do you have to be before this isn't an option for you anymore? This seems really ambiguous?作者: Unforseen 时间: 2011-7-11 20:10
pupdawg82 Wrote:
-------------------------------------------------------
> I would say anything beyond 10 makes client
> vulnerable
>
> no rule of thumb though
Ok 10% works for me... thanks Pup!作者: thommo77 时间: 2011-7-11 20:10
CF_AHHHHHHHHH Wrote:
-------------------------------------------------------
> Also, along the same lines...
>
> In the 2007 AM Exam Q1 they talk about the option
> of "re-employment" because the retired couple are
> still young (i.e., 50 years old)
>
> How old do you have to be before this isn't an
> option for you anymore? This seems really
> ambiguous?
It's subjective BS, but if they are 50'ish then it's an option, over 65 (maybe even 60?) it wouldn't be on.作者: cityboy 时间: 2011-7-11 20:10
remember, we're looking at guideline answers. they are including the b.s. of thousands of candidates that they couldn't reject as "wrong". they aren't looking for us to come up with that for full credit.作者: jmh530 时间: 2011-7-11 20:10
There are so many issues (terms) without tangible/clear definitions !作者: mp3bu 时间: 2011-7-11 20:11
I use the following, for income need
<5% higher ability to take risk
5-7% average
>7% lower ability
In the real world there aren't many that would say anything over 5% is a safe withdrawl rate and that takes into account inflation/mgmt fee.作者: PalacioHill 时间: 2011-7-11 20:11
Agree w/Sponge Bob. The only exception I can think of (will have to check tonight - don't have the answer key handy) is the '05 exam, #7. Anyone have this open now?
Re: their ability to work again, agree with jut111... it's a fluff answer that isn't technically wrong, so they incorporate into the answer key.作者: NakedPuts2011 时间: 2011-7-11 20:11
another point to remember - we're the ones that have looked more at old exams than the graders.作者: bpdulog 时间: 2011-7-11 20:11
Agreed. I wouldn't wholly rely on any rule-of-thumb作者: Chuckrox 时间: 2011-7-11 20:11
Those "fluff" things like "ability to work again" are actually used in the real world, at least we consider them. We have a client who retired early by traditional standards and pondered if he was too aggressive in this withdrawl rates....his ability to return to the workforce was even something he brought up; plus he has multiple homes which could also be liquidated to reduce expenses and raise funds.
I know they can be harder to incorporate because they aren't black & white, but it isn't just something embedded in academia with no real world application.
