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Retire at the Pie Shop
(Updated 2/2/08)
More I had completed the main article in 2005. But as that year has passed into the record books, I decided to continue tracking the “Retire at the Pie Shop” strategy. So the following chapters will be an annual progress report. Year 2005 has come and gone. Here’s how the Coffeehouse Portfolio fared:  Last year, we withdrew $46,371. And to keep pace with a 3% inflation rate, we will need to withdraw $47,762. First, we will gather the dividends.  Next, we take profits from the gaining funds. The profits were more than sufficient to meet our Year 2006 spending needs.  Year 2005 was another up year with no lagging funds. So this time, we will just rebalance.  We’re done with the sixth year of retirement. We’ve spent our sixth withdrawal of $46,371. And we have our seventh year’s withdrawal of $47,762 in the bank. So we’re prepared for another 12 months. Year 2006 has come and gone. Here’s how the Coffeehouse Portfolio fared:  Last year, we withdrew $47,762. And to keep pace with a 3% inflation rate, we will need to withdraw $49,195. First, we will gather the dividends.
However, I am making one minor change. In years past, I used 1% interest rate on cash. This year, I am raising that to 2% to reflect the fact that short-term rates have moved up.
 Next, we take profits from the gaining funds. The profits were more than sufficient to meet our Year 2007 spending needs.  Year 2006 was another up year with no lagging funds. So this time, we will just rebalance.  We’re done with the seventh year of retirement. We’ve spent our seventh withdrawal of $47,762. And we have our eighth year’s withdrawal of $49,195 in the bank. So we’re prepared for another 12 months. Year 2007 has come and gone. Here’s how the Coffeehouse Portfolio fared:  Last year, we withdrew $49,195. And to keep pace with a 3% inflation rate, we will need to withdraw $50,670. First, we will gather the dividends.
 Next, we take profits from the gaining funds. However, there were only two funds that had capital gains. And since the profits were not sufficient to meet our Year 2007 spending needs, the shortfall was drawn from cash.  Here is how our portfolio looks at the end of 2007:  We’re done with the eighth year of retirement. We’ve spent our seventh withdrawal of $49,195. And we have our eighth year’s withdrawal of $50,670 in the bank. So we’re prepared for another 12 months. |
