I frequently get questions about the “bucket strategy” I’m using for spending my assets in retirement. I prefer not to use the term “bucket” because my strategy differs from bucket methods in important ways. In fact, my retirement spending more resembles single-portfolio strategies. My decumulation approach involves holding 5 years’ worth of my annual spending in short-term fixed income and the rest in stocks (described in more detail in my post Cushioned Retirement Investing ). Each year, I sell enough stock to replenish the fixed-income allocation. My annual spending each year is calculated from my age and current portfolio value. As I get older, I spend a slightly higher percentage of my remaining portfolio (see the spreadsheet in my Cushioned Retirement Investing post for the exact percentages). If stocks perform well, my annual spending will rise, and if they perform poorly, my spending goes down. Because my annual spending changes from year to year, I have to calculat...

I didn’t write any posts since my last set of Short Takes, so I thought I’d start by weighing in on the furor Suze Orman stirred up when she said buying expensive coffee is “peeing $1 million down the drain.” In an effort to annoy everyone, I’m going to drive down the middle of the road. Orman’s example using a 12% rate of return for 40 years is just plain silly. She also ignores the time value of money that makes $1 million 40 years from now much less valuable than $1 million today. But she’s not wrong that small amounts of money add up and can undermine your saving efforts. There’s nothing wrong with buying coffee or other small things if you’re doing it thoughtfully, understanding their full cost over time. But that’s not how most people think. They just can’t imagine that such small amounts can make much difference. But they do. Orman’s critics are right when they say that the big things in life, like houses and cars, matter the most. But they’re wrong when they say th...

I wrote one post in the past two weeks: Consumers Can’t Avoid Computer Bots Here are some short takes and some weekend reading: Tom Bradley at Steadyhand looks at the current landscape of investment fees. Costs aren’t dropping in all areas. Dan Bortolotti answers a reader question about downside protection with stocks. Big Cajun Man has some tax trouble and shows what can happen to this year’s taxes when a previous year is still in dispute. The Blunt Bean Counter discusses the issues occupying his time this tax season.

You may have heard some people complain that when they used online chat on some big business’s website, they were chatting with a computer bot instead of a real person. You might think this isn’t a problem for you because you don’t use chat features on websites. Think again. The dream of big businesses is to run their customer interfaces with computers rather than employees. Most of the time I actually prefer to do things myself on a website, such as banking transactions, travel packages for my phone, and even some troubleshooting. However, there are times when we need to speak to a person to solve a problem. After you’ve waded through phone menus, listened to music for several minutes, and finally get a person on the line, you may not really be getting human responses. Increasingly, call center employees just read computer responses off a screen. As these computer algorithms get more sophisticated, call center employees make fewer decisions on their own. Even your local ba...