Permanent Portfolio using Vanguard LS40
Posted: February 4th, 2022, 12:49 pm
Vanguards LS40 (Lifestrategy 40/60 stock/bond) 75% weighted, along with 25% gold, approximates a Permanent Portfolio (given that generally the PP is permitted to drift between 15% and 35% lower/upper weightings for each of the stock/gold/short term bonds/long term bonds assets before rebalancing)
Vanguards web site shows LS40 historic yearly total return data back from 2012 and combining that in 75/25 LS40/gold proportions ...
Taking a 4% SWR (inflation adjusted 4% yearly income) and as of the end of 2021, ten years into retirement, the portfolio value = 91% of the inflation adjusted 2012 start date portfolio value (down from 95% at the end of the 9th year).
The general consensus with SWR is that of sustaining 30 years of income/withdrawals. Personally I think 25 years is a more appropriate range, as that sees a 65 year old retiree through to age 90 when perhaps you're more inclined to sell your home to fund all-inclusive care/retirement home for your remainder years. Having 90% of the inflation adjusted 2012 start date amount still available after 10 years, with another 15 years of drawdown expectation would seem well on course to likely be successful.
Vanguards web site shows LS40 historic yearly total return data back from 2012 and combining that in 75/25 LS40/gold proportions ...
Taking a 4% SWR (inflation adjusted 4% yearly income) and as of the end of 2021, ten years into retirement, the portfolio value = 91% of the inflation adjusted 2012 start date portfolio value (down from 95% at the end of the 9th year).
The general consensus with SWR is that of sustaining 30 years of income/withdrawals. Personally I think 25 years is a more appropriate range, as that sees a 65 year old retiree through to age 90 when perhaps you're more inclined to sell your home to fund all-inclusive care/retirement home for your remainder years. Having 90% of the inflation adjusted 2012 start date amount still available after 10 years, with another 15 years of drawdown expectation would seem well on course to likely be successful.