Michael Johnston is the co-founder and senior analyst at ETF Database, an online investment resource for ETF investors. ETF Database offers a proprietary ETF Screener that allows investors to filter the universe of 900+ ETFs to find the right fund. ETF Database also provides news, analysis, commentary, and actionable investment ideas on a daily basis.
Retired Financial Analyst with an investment plan derived from Charles D. Ellis' book "Winning The Loser's Game". My portfolio is invested in the global capitalization-weighted equity market through Vanguard tickers VTI, VEA, and VWO. Retirement spending is held to the dividends received from the portfolio so the capital is protected and allowed to grow.
What's it like to live with this portfolio in retirement? The answer is found at this Portfoliovisualizer.com link: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2016&lastMonth=12&endDate=01%2F20%2F2017&initialAmount=1000000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&showYield=true&reinvestDividends=false&symbol1=VTI&allocation1_1=52&symbol2=efa&allocation2_1=40&symbol3=EEM&allocation3_1=8
Notice your income from a $1 million portfolio starting in 2004 was $17,711 and "somewhat" steadily increased to $41,604 in 2016. In this same time frame, your portfolio balance fluctuated from a beginning balance of $1 million to a low of $755,138 at the bottom in 2008 and then went on to a value of $1,777,595 by the end of 2016. Focusing on the "steadily" increasing dividend is how a retiree manages to live with this volatile portfolio in retirement.
Here is a backtest approximation of the plan for thirty years beginning in 1986: https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=2&startYear=1972&endYear=2016&initialAmount=291143&annualOperation=3&annualAdjustment=0&inflationAdjusted=true&annualPercentage=2.5&frequency=4&rebalanceType=1&portfolio1=Custom&portfolio2=Custom&portfolio3=Custom&TotalStockMarket1=50&IntlStockMarket1=50